Friday 18 January 2019

Obituary: Charles Lazarus

Whimsical yet ruthless founder of Toys'R'Us, whose death has coincided with the demise of the global brand

Charles Lazarus
Charles Lazarus

Charles Lazarus, who has died aged 94, was the American founder of Toys'R'Us, which grew in its heyday to be the world's largest toy retailer.

But the chain fell into bankruptcy last year, and the announcement of his death coincided with news of the closure of its remaining stores.

Lazarus was once described as "the person most responsible for loosening Santa's grip on the toy business". He did so by creating a global chain of identical "big box" stores stacked from floor to ceiling with a range of as many as 18,000 different toys at discount prices.

And while traditional US department stores made 70pc of their annual toy sales in the pre-Christmas season, Toys'R'Us became a year-round success story, boosted by television advertising that made children clamour for whatever was the must-have of the moment, from Barbie and Cabbage Patch Kids to the Nintendo Game Boy.

"I don't want to grow up, I'm a Toys'R'Us kid," was a jingle that helped cash registers to sing.

Lazarus's technique, based on highly centralised financial controls, was to price the hottest items at the thinnest margins, or no profit at all, to convince shoppers that everything else in the store was a comparable bargain.

Wholesale suppliers were accordingly squeezed hard - but alongside the ruthlessness of the hard-driving entrepreneur, Lazarus also had a whimsical streak that contributed to the appeal of his brand. To be a truly creative toy retailer, he once said, "you have to think like a child".

Charles Philip Lazarus was born in Washington on October 4, 1923. His father Frank ran a workshop repairing and selling used bicycles from the family home. When young Charles asked why they didn't sell new bikes, the answer, which he never forgot, was that they could not compete with chain stores that sold at much lower prices.

After war service as a cryptographer, Charles went into business for himself in 1948, at first selling baby furniture - cribs, pushchairs and high chairs - from his father's shop to cash in on the post-war baby boom, and then toys for the same infants.

According to company legend, it was when a mother returned to replace a doll her baby had broken that Lazarus realised toys offered the prospect of multiple repeat sales, whereas most items of furniture are only bought once.

Originally called Children's Supermart, his first store in the Maryland suburbs of Washington became Toys'R'Us in 1957. Branches were added, and in 1966 he sold the fast-expanding business to a chain called Interstate Stores.

When Interstate fell into trouble in the mid-1970s, Lazarus was able to take control, reorganise the group under the Toys'R'Us brand, and float it on the stock market.

In the decade from 1975 to 1985, his sales multiplied tenfold to reach $2bn. A discount children's clothing chain, Kids'R'Us, was added to the offering, and latterly Babies'R'Us: Lazarus reckoned correctly that if nappies were very cheap, parents would spend the saving on toys.

In the early 1980s, Toys'R'Us ventured to Canada, Singapore and major cities across Europe, including some here, north and south of the border and across Britain.

Its arrival in the new breed of edge-of-town shopping centres of that era sounded a death knell for many an old-fashioned, family-run high-street toy shop.

Lazarus retired as chief executive in 1994 and as chairman four years later, remaining active as "chairman emeritus" and an international ambassador for the brand.

But Toys'R'Us was by then beginning to suffer from the advance of Walmart - a retailer that wielded even greater discounting power and which took over as the top US toy seller in 1998 - and other chains such as Target and Kmart. In the 2000s, online sellers such as Amazon captured another large slice of the toy market.

In 2005, Toys'R'Us was taken over by a private equity consortium; but as its debts rose and sales continued to flag, the company filed for bankruptcy in September 2017. Some 1,600 branches in 38 countries are now closing; no buyer has been found for the 100 UK outlets.

In the 1980s Lazarus was one of America's highest-paid executives. In 2013 he sold his Manhattan penthouse for $21m; his waterside estate in the Hamptons was on offer for $13.5m two years later.

Charles Lazarus was divorced in 1979 from his first wife Udyss, with whom he had two daughters who survive him. His second wife was Helen Singer Kaplan, a celebrated New York sex therapist who once joked that Charles suffered from an "edifice complex", meaning that he could not stop opening new stores.

Helen died of cancer in 1995, having presented him on her deathbed with a handwritten note (ending "Love Always") telling him that she had exercised a provision in their nuptial agreement entitling her to $20m on declaring intent to divorce. She wanted the money to go to her three children by an earlier marriage, but Lazarus successfully challenged their claim in court.

He married thirdly, Joan Regenbogen, an interior decorator, who also survives him.

Charles Lazarus, died on March 22.


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