(BLOOMBERG) - Charles Lazarus, who combined supermarket-style service with touches of whimsy in creating Toys 'R' Us Inc, a retail success that fought high debt and fierce competition, died last week. He was 94.
He died last Thursday (March 15) in Manhattan, Michael Goldstein, a close friend who was the company's former chairman, said in a phone interview.
From the first Toys 'R' Us outlet, opened in 1957 in the Maryland suburbs near his hometown of Washington, Lazarus stuck to a winning formula of high volume, discounted prices and cookie-cutter predictability.
As much as anyone, he transformed the toy business from Christmas-focused to year-round.
Delighted manufacturers ran proposed products by his company before committing to wide-scale production, according to a 1986 article in Atlantic Monthly magazine, which called Lazarus "the person most responsible for loosening Santa's grip on the toy business." His strategy created the world's largest toy-store chain.
Lazarus led the New Jersey-based company - now based in Wayne - through its 1966 sale to Interstate Department Stores Inc. and through Interstate's bankruptcy in 1974, which resulted in Toys 'R' Us emerging as the surviving company and going public in 1978.
Since Lazarus stepped down as chief executive officer in 1994 and chairman four years later, the company has faced new competition from online retailers such as Amazon.com Inc. and from the rise of Wal-Mart Stores Inc., which overtook it in US toy sales in 1998.https://twitter.com/toysrus/status/976897297836625920?s=21
Bain Capital LLC, KKR & Co. and Vornado Realty Trust took over Toys 'R' Us in a US$7.5 billion (S$9.9 billion) leveraged buyout in 2005.
Unable to fend off rivals while saddled with more than US$5 billion in debt, the company filed for bankruptcy in September 2017 and began closing down its US and British operations days ago.
The chain attempted to reorganise and sell its remaining international units. It had more than 1,600 Toys 'R' Us and Babies 'R' Us stores in 38 countries at that time.
The toymaker acquired FAO Schwarz and its flagship Fifth Avenue store in Manhattan in 2009.
As his chain expanded, Lazarus emphasised dependability over novelty.
The 18,000-plus toys for sale at any given time were the same in each store. Decisions on which items to stock, and how to display them, were made at corporate headquarters.
"There's an enormous opportunity in America if you're willing to make a commitment to inventory," Lazarus said.
Lazarus added personal touches such as the backward R in the store's name - "to give the impression that a child wrote it," according to a company history - and Geoffrey the Giraffe, the chain's mascot. Diapers were sold at deep discounts, encouraging parents to spend their savings on toys.
Lazarus earned more than US$60 million in 1987, according to Forbes magazine, making him No. 1 in its ranking of highest paid executives. Stock options accounted for about US$56 million.
In August 2013, Lazarus sold his duplex at 960 Fifth Avenue in Manhattan for US$21 million to Peruvian billionaire Carlos Rodriguez-Pastor.
"If you're going to be a success in life, you have to want it," Forbes quoted him as saying in 1983.
"I wanted it. I was poor. I wanted to be rich."
Charles Phillip Lazarus was born Oct 4, 1923, in Washington, the son of Frank and Fannie Lazarus. From an early age, he helped his father refurbish broken bicycles and sell them.
"I always wondered why we didn't sell new bicycles," he said. "My father said it was because the big chain stores could sell them so much cheaper than we could."
In 1948, following military service during World War II as a cryptographer, he took over his father's store and replaced the bicycles with baby furniture. He switched again, to toys, to get customers to return more frequently.
"Toys are a great kind of thing to sell, because they don't last that long," he said.
Supermarket Model He called his store Children's Supermart, with the Rs rendered backward. In the late 1950s, "motivated by the success of emerging self-service grocery supermarkets," according to the company history, he adopted a similar model - long lanes of products, carts for customers.
When he opened his first toys-specific store, in Rockville, Maryland, he went with a shorter name, Toys 'R' Us, to maximise the size of letters on the highway sign.
In 1966, with his four Washington-area stores totaling US$12 million in annual sales, Lazarus sold the company to Interstate Stores for US$7.5 million in cash, remaining as head of Interstate's toy division.
He opened 43 new store branches in the next eight years. Interstate didn't fare as well, filing for bankruptcy protection in 1974. When it emerged in 1978 as Toys 'R' Us Inc., a public company, Lazarus was CEO.
His second marriage, to psychiatrist Helen Singer Kaplan, founder of the Human Sexuality Program at the Payne Whitney Clinic in New York, made headlines upon her 1995 death from cancer at age 66.
The day before she died, Kaplan notified her husband by handwritten letter that she was exercising a provision in their marital agreement entitling her to US$20 million should either declare an intent to divorce.
"Nothing personal," she wrote. "I do not intend for you to leave the premises. It was only for the money for the kids" - she had three from her first marriage, while he had two from his - "and for the art."
Lazarus challenged Kaplan's deathbed claim, saying it lacked any true intention to divorce him. He battled Kaplan's children - Phillip, Peter and Jennifer - in court until 2000, when, according to a New York Daily News article, a Manhattan Surrogate Court judge dismissed the children's fraud claim against Lazarus.
Lazarus had two daughters, Ruth and Diane, with his first wife, Udyss, according to New York magazine. They divorced in 1979. He later married Joan Regenbogen, an interior decorator.