Don’t wait too long to use gift cards, hit sales

Big- box chain Toys R Us, which filed for bankruptcy late last year, is planning on closing or selling its remaining 735 U. S. stores, including seven in Colorado, in the coming months. The company says it was burning through $ 50 million to $ 100 million in cash a month as it struggled to pay back billions in debt.

“The stark reality is that [ Toys R Us is] projected to run out of cash in the U. S. in May 2018,” the company said in a court filing on Thursday.

Bankruptcy lawyers say the chain, which also includes Babies R Us stores, must move quickly. Here’s what’s likely to be in store. the next week or two, bankruptcy lawyers say. Toys R Us, which is awaiting court approval for its liquidation request, already has assembled a collection of liquidation firms to take over its stores and sell off inventory as quickly as possible. Discounts will likely begin on the low end — 25 percent off, say — and increase in coming weeks. But there’s a catch: All sales are typically final once liquidation discounts begin.

“They’re working on a very tight time table,” said Eric Snyder, chairman of the bankruptcy department Wilk Auslander, a New York law firm. “And their timing could not be worse: March and April are not great times to be selling toys, so they are under pressure to make this work.”

But not all stores may have going- out- of- business sales right away. Toys R Us has said it plans to liquidate 590 stores, but has identified 200 of its best- performing stores that it is trying to sell off with its Canadian operations.

Q: What happens to my gift cards?

A: Toys R Us says it will honor existing gift cards, as well as its Rewards dollars and Endless Earnings, for another 30 days. After that, you basically risk forfeiting any remaining value.

It was not immediately clear what would happen to customers’ layaway plans or baby registries. will pay employees for another 60 days, which it is required to do by law. But bankruptcy lawyers say some stores could shut down even sooner than that, as the company winds down its operations. The closures, bankruptcy experts say, are likely to create mounting headaches for landlords and shopping malls, which are already struggling with high vacancy rates.

A: Probably not. Toys R Us is looking for a buyer for its Canadian arm — which is in better financial shape than the company’s U. S. operations — and still has stores in central Europe and Japan.

The retailer is also hoping to find a buyer for its website, as well as some of its more successful U. S. locations. Buyers are already showing interest: Isaac Larian, the chief executive of toy giant MGA Entertainment, on Wednesday submitted a bid to buy Toys R Us’s Canadian arm, which includes 82 stores, according to Larian. He added that he is also looking into buying as many as 400 U. S. stores, which he would seek to operate under the Toys R Us name.

“There is no toy business without Toys R Us,” Larian said, noting that he sold his first product to the chain in 1979. “It’s a big deal and I’m going to try to salvage as much of it as possible.”

Toys R Us through the years

Here’s a look at Toys R Us through the years:

1948: Toys R Us founder Charles Lazarus opens Children’s Bargain Town, a baby furniture store, in Washington, D. C.

1957: First Toys R Us store is opened.

1965: Geoffrey the giraffe becomes the company’s mascot. He appears in his first TV ad in 1973. The company sells stuffed animals, Lego sets and figurines in Geoffrey’s likeness.

1978: Toys R Us becomes a public company.

1983: Kids R Us opens, selling children’s clothing. It had a 20- year run before all 146 stores were closed in 2003. 1996: Babies R Us is born, selling diapers, cribs and car seats. There were more than 200 Babies R Us stores as of last year.

1998: The ToysRUs. com website is launched.

2005: The company is bought by three private equity firms and taken private.

2007: Toys R Us buys well- known New York toy store FAO Schwarz. It closes the store in 2015 and sells the brand a year later.

2015: Toys R Us closes its flagship store in New York’s Times Square, which had a 60- foot Ferris wheel, after 14 years.

2017: Toys R Us files for Chapter 11 bankruptcy protection.

2018: Toys R Us, following poor holiday sales, files a plan to close or sell its 740 stores in the U. S.