In-Depth: What led to Creative Kidstuff closing its doors?

April 03, 2019 05:41 PM

The popular children's toy store Creative Kidstuff is going out of business.

Its six locations around the Twin Cities will close by the end of June.

The company opened its first store in Minnesota in 1982. But President Roberta Bonoff said a lot has changed in the nearly four decades that have followed.

RELATED: Creative Kidstuff to close 6 metro area locations by June

"I believe where we got caught was right in the middle," she said. "We couldn't grow big enough, and going smaller was just something we didn't want to do as a company." 

Over its 38 years, Creative Kidstuff built a brand and following in the Twin Cities that made it the go-to place for toys. But Bonoff said the model that served the store so well for so long was simply no longer sustainable in 2019.

"No matter how hard we tried, and we tried really hard to keep up with the changing times - we're innovators non-stop - it just got to the point where we had to make the decision to close our brick and mortar stores," Bonoff said.

Bonoff said a number of factors slowly chipped away at the company's bottom line. 

Those factors include minimum wage requirements, rising healthcare costs and even paper versus plastic bags.

Though ultimately Bonoff said it came down to a shift in habits in how kids play. 

Instead of physical toys like the ones Creative Kidstuff sells, Bonoff said many kids have shifted to playing games on iPhones and iPads.

Bonoff also acknowledges that more recently far too many Creative Kidstuff customers have opted to spend their money on Amazon and at Target.

"We've just as a society really changed," Bonoff said. "If you take the buying pattern, and the change of how children play, and you put them together, it's kind of a perfect storm."

But Paul Vaaler, an Associate Professor and John and Bruce Mooty Chair in Law and Business at the University of Minnesota's Carlson School of Management, said no one should write the obituary for so-called brick and mortar stores just yet.

"I don't think it indicates any broad trend," Vaaler said of the Creative Kidstuff closings. "There are examples of small niche retailers - small niche service providers that do very well.  

"They come up with a differentiated product that customers will pay for."

Yet from her standpoint, Bonoff said it's clear customers' habits have shifted, signaling the end for places like Creative Kidstuff.

"The way we're moving as a society is pretty fast these days," she said. "Maybe that is the future and we just have to accept the change that's happening out there."

Creative Kidstuff will remain open through the end of June.  A liquidation sale started Wednesday. In all, approximately 100 people will lose their jobs as a result of the closure.

A wholesale division consisting of six employees will remain open.

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Tim Vetscher and Lindsdey Brown

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