Toys "R" Us Inc., the once-dominant specialty retailer and ultimate toyland for a generation of post-war baby boomers, filed for bankruptcy thanks to a crushing debt load from a previous buyout and relentless competition from warehouse and online retailers.
Even as it deals with the bankruptcy and restructuring proceedings, Toys "R" Us announced in a statement that its online and physical stores, as well as those of Babies "R" Us, will still operate normally, perThe Star Online.
Toys "R" Us Inc, the largest US toy store chain, filed for bankruptcy protection late Monday, the latest sign of turmoil in the retail industry that is caught in a viselike grip of online shopping and discount chains.
As Toys " R " Us Canada continues to position itself for the future, the Company is also extending the successful customer-centric store format that opened in Langley, British Columbia in July 2017 to a new store in South Barrie, Ontario that will open in November 2017.
The company listed debt and assets of more than $1bn each in Chapter 11 documents at the US Bankruptcy Court in Richmond, Virginia.
Private equity firms Bain Capital and KKR & Co LP and real estate investor Vornado Realty Trust now own the toy seller, but the retailer will have new owners once it emerges, Brandon said.
Jon Copestake, chief retail and consumer goods analyst at the Economist Intelligence Unit, said the bankruptcy filing has come as "little surprise".
The filing comes just as the retailer is gearing up for the holiday shopping season, which accounts for the bulk of its sales. Two years later, the first Babies "R" Us opened. Either way, for '90s gamers, the company's Chapter 11 announcement is concerning news.
United States debtor-in-position loans allow a company to tap new lenders who get preferential security, while it goes through Chapter 11, helping the business trade throughout its insolvency process. Walmart, the largest toy store in the country, claimed the second spot online with almost $1.3 billion. It hasn't worked. Neither have its big bets on licensed toys from movies like "Star Wars" and "Lego", as the Wall Street Journal noted.
Toys R Us' filing was not entirely surprising; there had been rumors for weeks that it might seek bankruptcy protection, and its top executives had warned in recent months that the chain was struggling.
In fact, many of its agreements with debt holders prohibit the company from closing stores, restricting its ability to slim down.
If the bankruptcy restructuring can help Toys "R" Us get a handle on its debt, it's not insane to see a profit in sight. Among them were Perfumania Inc, apparel chains rue21 Inc and Gymboree Corp, discount shoe chain Payless Holdings LLC and designer clothing chain BCBG Max Azria Global Holdings LLC. Sales of fidget spinners, a toy that has become ubiquitous in the past year, got twirling online first.