Toys R Us reportedly considering closing all United States stores

Jon Howard
March 10, 2018

Bloomberg has reported that Toys R Us is planning a complete liquidation of its USA operations that are now under bankrupt protection as it has not located a buyer or reached a restructuring deal for its debt with lenders. Officials had hoped the US operations would emerge with a new business model and less debt.

New Jersey- based Toys R Us filed for bankruptcy in September, bolstered soon after by a $3.1 billion loan.

Toys R Us Canada says it's business as usual amid reports that the retailer's USA counterpart is preparing to liquidate operations in the United States.

The brick and mortar retailer has been struggling to reorganize and balance massive debt.

The situation has also deteriorated for numerous retailer's overseas divisions, which weren't part of the bankruptcy, according to the report. Receiving debtor-in-possession financing and bankruptcy protection, Brandon said, would "ensure the iconic Toys R Us brand stays viable for years to come". Its European arm is seeking takeover bids.

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But it had an additional burden that stacked the deck against it - close to $5 billion in debt resulting from a leveraged buyout in 2005. The company's huge interest payments also forced it to use resources that could have gone toward improving technology and operations. A standalone chain of stores offered children and their parents a chance to wander aisles of toys uninterrupted by other merchandise.

The company has not commented on the report. Bigger rivals like Walmart Inc. and Target Corp. would typically take a more cautious approach.

Mattel's shares fell 6 percent to $14.96, while those of Hasbro dipped almost 3 percent to $90.75 in early trading.

Toys "R" Us is the last megastore dedicated to toys.

Toys R Us customers are being urged to use up all the money on their gift cards this weekend or they'll risk losing money as the company begins closing down stores across the country.

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