Toys R Us to sell Canadian stores
Childrens’ furniture, toys home in U.S. will be closed after dismal Christmas holiday sales
TORONTO — Toys R Us is in talks to sell its entire Canadian business as it works to shutter its U.S. operations.
Toys R Us Canada says the U.S. company is seeking approval in its Chapter 11 proceedings for the sale of its equity interest in the Canadian business.
California-based toy company MGA Entertainment Inc. has said it has submitted a bid for the Canadian stores.
Toys “R” Us Canada’s business is managed in Canada and operates autonomously from the U.S. operations.
The Canadian business says it remains committed to serving its customers at its 82 stores, which remain open for business. Toys “R” Us American CEO David Brandon has said the company will try to bundle its Canadian business, with 200 top-selling U.S. stores, to find a buyer.
Late Wednesday, the U.S. company asked for bankruptcy court approval to shut down its hundreds of remaining stores in the U.S. and Puerto Rico following dismal sales during the crucial holiday shopping season.
Toys R Us hasn’t announced a timeline for the liquidation, but bankruptcy court filings indicate sales at the 735 stores could begin immediately and end by July 31. Closing sales have begun at 144 U.S. stores that Toys R Us earlier this year decided to shut down.
Toys R Us said it notified its 33,000 U.S. employees Wednesday of plans to shut down.
News came about six months after Toys R Us sought Chapter 11 bankruptcy protection. At the time, the struggling retailer sounded optimistic about a turnaround, and it secured a loan of more than $3 billion to keep business going during restructuring.
But U.S. sales over the holidays were “well below worst case projections.” They also had trouble matching competitors’ prices.
“I am very disappointed with the result, but we no longer have the financial support to continue ... U.S. operations,” Brandon said Wednesday in a news release.
He called it a “sad day for ... the millions of kids and families who we have served the past 70 years.”
The company got its start in 1948, when founder Charles Lazarus opened baby furniture store Children’s Bargain Town in Washington, D.C., amid the postwar baby boom. He added toys to encourage parents to return, before opening his first toys-only shop — Toys R Us, with the backwards “R” logo to mimic a child’s writing.