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Photo by Tim Boyle/Getty Images

Toys "R" Us formally launched its liquidation process shortly after midnight, via a bankruptcy court filing. This came hours after more than 33,000 U.S. employees were told their jobs are likely to disappear.

Bottom line: There is plenty of blame to go around, including for the private equity firms that bought Toys "R" Us in 2005, the senior lenders who control it now and an increased focus on toys by generalist retailers like Amazon and Wal-Mart.

Nothing is finalized yet. There is still some hope that around 200 strong-performing U.S. stores could be merged with the much-healthier Canadian operation.

A key number is $81 million, which was EBITDA for U.S. stores in Q4 2017 (i.e., holiday season). That's well below $374 million in Q4 15 and $347 million in Q4 16, not to mention below lender projections of around $330 million.

Finger pointing
  • Private equity firms Bain Capital and KKR paid too much, larded on too much debt, paid themselves handsomely and didn't adequately foresee the changing face of American retail.
  • The senior lenders seem to have decided that it would be more lucrative to burn the whole thing down, rather than salvage hundreds of viable stores and thousands of jobs.
  • Amazon, Wal-Mart and Target threaten most specialty retailers, but took particular aim at the toy market. Toys "R" Us simply couldn't compete, and wasn't helped by an early 2000's belief that it would be better to partner with Amazon than fight against it.

Toys "R" Us CEO Dave Brandon told me two years ago that a key to specialty retail success would be exclusive product. Either Toys "R" Us and Babies "R" Us didn't have enough of it, or he was wrong. But Brandon got well compensated either way.

Go deeper

Dominion sends cease and desist letter to My Pillow CEO Mike Lindell

Photo: Stephen Maturen/Getty Images

Dominion Voting Systems on Monday sent a cease and desist letter to My Pillow CEO Mike Lindell over his spread of misinformation related to the 2020 election.

Why it matters: Trump and several of his allies have pushed false conspiracy theories about the company, leading Dominion to take legal action. It's suing pro-Trump lawyer Sydney Powell for defamation and $1.3 billion in damages, and a Dominion employee has sued Trump himself, OANN and Newsmax.

Off the Rails

Episode 5: The secret CIA plan

Photo illustration: Aïda Amer, Sarah Grillo/Axios. Photo: Zach Gibson/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. This Axios series takes you inside the collapse of a president.

Episode 5: Trump vs. Gina — The president becomes increasingly rash and devises a plan to tamper with the nation's intelligence command.

In his final weeks in office, after losing the election to Joe Biden, President Donald Trump embarked on a vengeful exit strategy that included a hasty and ill-thought-out plan to jam up CIA Director Gina Haspel by firing her top deputy and replacing him with a protege of Republican Congressman Devin Nunes.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Health: CDC director defends agency's response to pandemic — CDC warns highly transmissible coronavirus variant could become dominant in U.S. in March.
  2. Politics: Empire State Building among hundreds to light up in Biden inauguration coronavirus tribute.
  3. Vaccine: Fauci: 100 million doses in 100 days is "absolutely" doable.
  4. Economy: Unemployment filings explode again.
  5. Tech: Kids' screen time sees a big increase.