Toys R Us Beat Amazon in Court. It Was Already Too Late

In 2000, Toys R Us handed its online store to Amazon: a ten-year deal, a $50 million yearly base fee, and a promise that it would be the only toy seller on the site. By 2004 thousands of rival products had appeared, Toys R Us sued, and in March 2006 a New Jersey judge let it walk away. It had won. But it had already spent six years without a website of its own, and in 2005 it had been bought in a $6.6 billion leveraged buyout that left an interest bill of about $400 to $540 million a year. This is the story of those two contracts, told from the court ruling, the company's own filings and press releases, and what Target did differently. A business story, not investment advice. 0:00 The Supermarket for Toys 2:51 Christmas 1999 5:14 Earth's Greatest Toy Store 7:49 Winning in Paterson 10:12 The Other Contract 12:52 The Store You Rent Sources: Superior Court of New Jersey ruling, Toys R Us v. Amazon (March 1, 2006); Toys R Us SEC filings (10-K 1999-2017, 10-Q 2009, S-1 2010, 8-K 2017); Toys R Us press releases (May 24, 2004; March 17, 2005); Amazon press release (Aug 10, 2000) and 8-K (June 2006); FTC press release (July 26, 2000); Toys R Us / PR Newswire release (Sept 17, 2026); NPD Group via Chief Marketer; AP; Reuters; Fortune; Supermarket News; Boston Globe; BuzzFeed News; Anadolu Agency Photo credits: watts_photos / via Openverse / PDM — https://www.flickr.com/photos/1262883... Jeff_Bezos'_iconic_laugh.jpg: Steve Jurvetson derivative work: King of Hearts / Wikimedia Commons / CC BY 2.0 — https://commons.wikimedia.org/wiki/Fi... dankeck / via Openverse / CC0 — https://www.flickr.com/photos/1406411... Toys “R” Us / Wikimedia Commons / Public domain — https://commons.wikimedia.org/wiki/Fi... KDavid Montero / Unsplash / Unsplash License — https://unsplash.com/photos/a-walmart... Lore Schodts / Unsplash / Unsplash License — https://unsplash.com/photos/brown-gif... Kurt Kaiser / Wikimedia Commons / Public domain — https://commons.wikimedia.org/wiki/Fi... Stephen Plopper / Unsplash / Unsplash License — https://unsplash.com/photos/space-nee... Jacques Dillies / Unsplash / Unsplash License — https://unsplash.com/photos/warehouse... David / Wikimedia Commons / Public domain — https://commons.wikimedia.org/wiki/Fi... Shabaz Usmani / Unsplash / Unsplash License — https://unsplash.com/photos/a-target-... Mike Scheid / Unsplash / Unsplash License — https://unsplash.com/photos/body-of-w... Victor He / Unsplash / Unsplash License — https://unsplash.com/photos/people-wa... Liarfreak63 / Wikimedia Commons / CC0 — https://commons.wikimedia.org/wiki/Fi... Campaign Creators / Unsplash / Unsplash License — https://unsplash.com/photos/person-us... Tomas Eidsvold / Unsplash / Unsplash License — https://unsplash.com/photos/brown-con... Dan Keck from Ohio / Wikimedia Commons / CC0 — https://commons.wikimedia.org/wiki/Fi... Michael Rivera / Wikimedia Commons / CC0 — https://commons.wikimedia.org/wiki/Fi... Roc0ast3r / Wikimedia Commons / CC0 — https://commons.wikimedia.org/wiki/Fi... Jim Luo / Unsplash / Unsplash License — https://unsplash.com/photos/a-large-r... Video credits: USDAgov / Wikimedia Commons / Public domain — https://commons.wikimedia.org/wiki/Fi... USDAgov / Wikimedia Commons / Public domain — https://commons.wikimedia.org/wiki/Fi... Licences: CC BY 2.0 https://creativecommons.org/licenses/... · CC0 https://creativecommons.org/publicdom... · PDM https://creativecommons.org/publicdom... · Unsplash License https://unsplash.com/license