Lessons Learned From the Downfall of Toys 'R' Us

It's been more than 12 years since a group of private equity firms loaded up Toys "R" Us Inc. with debt to take it private. The retailer's balance sheet would never recover, and while that may not have been obvious then, the writing was always on the wall.

Following the bankruptcy of its U.S. division in September, the Wayne, New Jersey-based retailer is now preparing to liquidate that business, having failed to find a buyer or reach a restructuring deal with lenders, Bloomberg News reported Thursday. Clearly, Toys "R" Us was hurt by the rise in online shopping and shifting trends that saw more kids choosing to play with iPads over Barbie dolls and Hot Wheels. Still, the numbers behind its downfall reveal how it was hastened by an overburdened balance sheet.