Warren Kornblum on Toys R Us From the Brand Stand [017]

The other thing people have said to me, like, what do I consider my greatest failing in those years? And to me, it's pretty simple, especially looking back in retrospect, which was when I got there, I said, ToysRUs.com should be the Disney of retail toy stores.

It should be this amazing experience where kids go on.

And in those days, early 2000s, obviously building out a website like that was significantly more expensive than it would be today.

Um, and I, I went to the board in those days, which was in the public days.

And I said, you know, I think we need probably five or $600,000 to bring in some really good, talented web designers and create this site.

And it should be a safe haven for kids and somewhere that parents don't mind them going and yes, sell toys, but also, you know, that's where the Disneyland analogy in my mind comes in.

And I was shot down.

And I still to this day think, boy, if I had fallen on that sword, well, I might have been dead and gone way earlier.

We wouldn't be talking.

I think it was one of the fundamental misses that we had is that we just got clobbered.

And it just

kept happening, Warren.

I mean, like, again, you got to come to Columbia and teach this case with me because you'll have so much fun doing this.

When I was there, so of course, you know, it went to Amazon,

right?

So Toys R Us was the first kind of uh reseller on the amazon website we owned toys on the website so if you bought a toy from amazon you were buying from us in the year whatever two thousand three four five through that period um and um amazon started selling toys from other resellers target in particular

so we sued them

and the only thing we wanted was let us out of the contract and we'll build our own website this is a great story this is how private equity works you want to know how it works you're about to hear so we sue them it's going back and forth and um There's two important things.

One, Amazon wasn't quite Amazon yet, but they were becoming Amazon.

And the other important point, which you'll recall when I say it is, the contract with Amazon was based on New Jersey law and domiciled in New Jersey.

Right.

So because we had a little bit of power, you did at the time, a little bit of power, the attorneys had New Jersey law and, you know, it would be litigated in New Jersey.

And as you know, there wasn't a politician in New Jersey that Toys R Us didn't contribute to in some way and whose kids didn't shop at a Toys R Us.

So we sue them, a famous phone call with Bezos.

We're on the call.