Toys "R" Us files for bankruptcy as holiday season approaches

21 September, 2017, 00:42 | Author: Valerie Burke
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Toys "R" Us, the Wayne New Jersey-based toy retailer, has 1,600 Toys "R" Us and Babies "R" Us stores around world, which are continuing to operate as usual.

In the meantime, Toys "R" Us isn't planning to close any stores, but rather, the company is hoping to reform itself to move forward and become more viable on the market.

According to Retail Dive, suppliers were "scaling back shipments" and demanding cash payments upon delivery in the months leading up to the bankruptcy filing, meanwhile Toys R Us hired a law firm to discuss how to manage its $400 million debt.

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.

Vicky Contoudios, 36, who is visiting NY from Brisbane, Australia, said she was shocked to hear of the bankruptcy and hoped the company wouldn't fold. Its Canadian subsidiary also sought creditor protection under the Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice Tuesday.

The big question as we head towards the end of the year and the retail sector's busiest time of the year is whether the collapse of Toys "R" Us is a harbinger of further retail weakness, or merely a result of a legacy of bad management in the United States, and that underneath there is a decent retail business underneath.

Will Toys "R" Us and Babies "R" Us continue to run typical sales and promotions? The Chapter 11 filing is one of the largest by a specialty retailer.

The surprise cancellation came on the heels of Toys "R" Us admitting on September 6 that it had hired a restructuring law firm, Kirkland & Ellis, to help it with $400 million in debt that's coming due in 2018 - a disclosure that had already spurred some vendors to halt shipments to stores.

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The 69-year-old toy store has filed for bankruptcy protection as it tries to reorganize. S&P Global Ratings dropped its ratings this Monday from B- of two weeks ago to CCC-, with news about Toys "R" Us' possible restructuring as the reason.

The last ten years have been a bonfire for retailers on both sides of the Atlantic as consumer shopping habits have changed and the popularity of big box out of town retail stores has declined.

Rest easy, kids. Toys "R" Us Inc. isn't going anywhere, at least not if the makers of Barbie and Transformers have their way.

Yes. Your "R" Us Credit Card will continue to be accepted.

Toys R Us traces its roots to 1948, when founder Charles Lazarus opened a baby furniture store in Washington.

The company opened a temporary store in New York City's Times Square this year to capture more holiday shoppers, nearly two years after it closed its flagship store barely a block away, driven out by high rents.

"When the fall expansion is completed, Mastermind Toys will have 1,100 employees, adding over 50,000 (square feet) to its retail footprint", the company said. In the early 1990s, sales grew at a 10 percent annual clip; past year, they dipped 2.2 percent.

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