The Bowdoin Orient

February 16, 2001
Volume CXXXII, Number 16

eToys to close, alum files for bankruptcy

by ERIC CHAMBERS, STAFF WRITER

   Last month, Bowdoin alumnus Toby Lenk '83 announced his plans to close eToys, a highly-publicized online retail venture, and lay off his remaining 293 employers on April 6. According to USA Today writer Bruce Horowitz, "In just one year, eToys went from being a perceived threat to retailing giant Toys 'R' Us to just another e-commerce casualty."
   Many economists are blaming the failure of eToys on poor customer service and expensive advertising campaigns, both of which resulted in eToys not being able to adequately meet the needs of its customers.
   Marketing tactics are what helped make eToys strong. It became a household name for its unique, yet very pricey, print advertisements and commercials, which appealed to both parents and children.
   eToys was launched in June 1997, originally with the sole purpose of selling educational toys. However, founder and CEO Lenk expanded the operation, with the goal of rivaling such established corporations as Toys 'R' Us as the prime retail market for toys and children's goods. The site was highly anticipated by many marketers and economists, believing that such an expansive venture could be daring enough to work.
   However, during the 1999 holiday season, eToys was accused of falling short of one of its initial goals-speedy and reliable customer service. Thousands of customers complained that their orders were either late in arriving at their destination or contained the wrong merchandise.
   eToys suffered another blow in 2000 when Amazon.com agreed to team up with Toys 'R' Us to create an even more expansive online toy retailer.
   Disappointing 2000 holiday sales, in which the company fell short of its goal of earning $212 million, forced the company to lay off 700 employees in early January and shut down all but one of its warehouses. On February 5, Lenk announced that his company was filing for bankruptcy.
   Lenk graduated summa cum laude from the College in 1983. After working in Washington, D.C., he attended Harvard Business School, where he earned his MBA. He then entered the consulting business before accepting a job with Disney in 1991.
   In 1996, he left Disney to cultivate eToys. Lenz spoke at Common Hour in April 2000.

Information gathered from Business Week Online and USA Today.