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

Toys R US Kungens Kurva september 2016 59c26d36af8ca

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

It remains unclear if Toys "R" Us will offer the console online or in physical stores only, although the console has a listing online.

Toys "R" Us stayed tight-lipped on its reasons for scrapping this week's meetings, according to insiders - leading still more manufacturers to conclude that the retailer was in such dire straits that it might not be able to pay for its holiday inventory.

The toy giant said its roughly 1,600 global stores will continue to operate normally, with the vast majority profitable, but it has struggled with the burden of $5 billion in long-term debt.

Toys R Us' Canadian subsidiary intends to seek similar protection under the Ontario Superior Court of Justice's CCAA.

The move would ensure the Canadian subsidiary of the global toy retailer - which applied for creditor protection in the US on Monday and in Canada a day later - has an uninterrupted supply of merchandise as it heads into the busy holiday shopping season.

The 69-year old Toys "R" Us was once the mecca of kids' gifts.

Toys "R" Us joins a list of hundreds of companies that have succumbed to the online threat and filed for bankruptcy protection this year. However, the Australian and European operations, as well as a joint venture partnership in Asia, are not included in the Chapter 11 filing.

Will Toys "R" Us stick around in Canada?

The company said it received a commitment for up to $3.1 billion in debtor-in-possession financing from lenders including a bank syndicate led by JPMorgan Chase & Co and certain existing lenders.

"Our customers around the world can continue to count on an outstanding shopping experience and excellent service whenever, wherever and however they choose to shop with us", he said.

The North American filing by Toys "R" Us Inc is the latest sign of trouble in the retail industry disrupted by online shopping and discount chains.

There were 1,600 stores in 38 countries.

Toys R Us, like other companies who have filed for bankruptcy protection, such as Payless ShoeSource Inc. and Gymboree Corp., have to get with the program. After all, just because a classic brick-and-mortar institution is falling on hard times doesn't mean kids will stop wanting some of the world's most popular toys. After being taken private in 2005, Toys "R" Us filed for an initial public stock offering in 2010. Toys "R" Us backed MGA's collectible L.O.L. Surprise Dolls, making a big order, placing it at the front of stores in January.

Will Toys "R" Us and Babies "R" Us continue to run typical sales and promotions?

Further bolstering its prospects, Toys "R" Us's underlying business, which generated $11.5 billion in sales past year, remains solid. USA toy sales rose 6 percent last year on top of a 7 percent increase in the prior year, according to NPD Group Inc., a market research firm. Back then, KKR, Bain Capital, and Vornado Realty Trust acquired the toy retailer in a $7.5 billion leveraged buyout, and now find their investment wiped out.

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