It’s games over for Toys R Us chain
The national toy retailer moves toward permanent liquidation.
Toy store chain Toys R Us is planning to sell or close all 800 of its U.S. stores, affecting as many as 33,000 jobs as the company winds down its operations after seven decades, according to a source familiar with the matter.
The news comes six months after the retailer filed for bankruptcy. The company has struggled to pay down nearly $8 billion in debt, much of it dating back to a 2005 leveraged buyout, and has had trouble finding a buyer. There were reports earlier this week that Toys R Us had stopped paying its suppliers, which include the country’s largest toy makers. On Wednesday, the company announced it would close all 100 of its U.K. stores. In the United States, the company told employees closures would occur over time, and not all at once, according to the source, who spoke on the condition of anonymity because they were not authorized to discuss internal deliberations.
Toys R Us, once the country’s pre-eminent toy retailer, has been unable to keep up with big-box and online competitors. The recent holiday season dealt another blow to the embattled company, which struggled to find its footing even as the retail industry racked up its largest gains in years. In January, Toys R Us announced it would close 182 U.S. stores, or about onefifth of its remaining locations.
Despite turnaround efforts at Toys R Us, which included adding more hands-on “play labs,” retail experts say the 70-year-old company has been unable to get customers back into its stores.
Its bankruptcy filing cited $7.9 billion in debt against $6.6 billion in assets. The company said it has more than 100,000 creditors, the largest of which are Bank of New York (owed $208 million), Mattel ($136 million) and Hasbro ($59 million).