Toys R Us Filed for Bankruptcy and People Are Upset


Javes said Toys "R" Us (Asia) has been opening new stores in the region.

"While today's decision does not necessarily mean it is game over for Toys "R" Us, it brings to a close a turbulent chapter in the iconic company's history", said Neil Saunders, managing director of GlobalData Retail.

The Chapter 11 filing by the biggest US toy store chain, to restructure $5 billion of long-term debt, is among the largest ever by a specialty retailer and casts doubt over the future of the company's 64,000 employees and almost 1,600 stores, which remain open.

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 news of the bankruptcy dragged the stocks of Toys "R" Us merchants.

Brick and mortar retailers continue to face pressure from online competition and changing consumer taste, helping lead to high profile restructurings including Sears Canada's bankruptcy protection this past June.

Chapter 11 bankruptcy protections are often sought by heavily debt-laden companies in order to improve their balance sheets.

It also confirmed its stores outside of North America - including the United Kingdom and Europe, Australia, as well as around 255 licensed stores and a joint venture in Asia - were not affected by the so-called Chapter 11 filing.

In its fight to stay relevant, Toys "R" Us amassed $5 billion in debt.

More news: Change My Be Coming for Some National Monuments
More news: May hopes to boost Bombardier on trade mission to Canada
More news: Ryanair Slumps as Scrapped Flights Risk Reviving Bad-Boy Image

The company has received a commitment for over three billion US dollars in debtor-in-possession financing from various lenders, including a JP Morgan-led bank syndicate and certain of the Company's existing lenders. Toys R Us just didn't grow up with us.

The company's Toys "R" Us and Babies "R" Us stores and e-commerce sites around the world are open for business, it said.

"Will Toys R Us be around for Christmas in 2018?"

"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.

"Toys "R" Us has developed a reputation for being expensive retailer for toys", Lee said.
"If they ship blindly to Toys "R" Us they could be on the wrong side of a receivership and go to the back of the line when it comes time to get paid".

The company intends to use the process to restructure itself, with a view of making the business not only viable but successful in the long term.

Much of the toy merchant's debt is the legacy of a $7.5 billion leveraged buyout in 2005 in which Bain Capital, KKR & Co. and Vornado Realty Trust loaded the company with debt to take it private.

The Associated Press reported that GlobalData Retail estimates that in 2016 about 13.7 percent of toy sales were made online, up from 6.5 percent five years ago.