"Toys R Us' bankruptcy is a reminder that what we are going through right now in retail is not an evolution, but a real revolution", said Roger Beahm, executive director of the Center for Retail Innovation at Wake Forest University School of Business. The retailer said Monday night that, "to achieve its financial objectives, Toys'R'Us and some of our USA subsidiaries and our Canadian subsidiary proactively and voluntarily filed for Chapter 11 of the Bankruptcy Code in the U.S".
The company said it will continue to operate as usual its approximately 1,600 Toy R Us and Babies R Us stores around the world.
According to the court documents filed in Toronto in support of the insolvency under the Companies' Creditors Arrangement Act (CCAA) on Tuesday, business at Toys "R" Us stores in Canada was good, but got bogged down by credit issues facing its corporate parent in the U.S.
Toys "R" Us (Asia), which runs the Asian business, said in a statement that it is a separate legal entity and financially independent of all other operating companies worldwide.
The filing comes just as the retailer is gearing up for the holiday shopping season, which accounts for the bulk of its sales. For children of the 1980s, Toys "R" Us was a mecca at the strip mall, an awe-inspiring array of dolls, trucks, board games, bikes, art supplies and much more.
The Asian toy company's president, Mr Andre Javes, said: "We are a financially robust and self-funding retail operation, which continues to significantly grow and invest in this region". "We continue to offer fantastic new seasonal products and great customer service, just as we always have".
We're witnessing an alarming trend in the American retail industry.
According to Bloomberg, Toys "R" Us' decision to file for bankruptcy would let it concentrate on its debt of $400 million that must be paid in 2018.
The company wants to assure all its customers and stakeholders that through this process its 82 stores across every province and e-commerce sites toysrus.ca and babiesrus.ca are open for business.
By the time Lazarus retired in 1994, the company had grown to more than 1,000 stores.
Yes. Your "R" Us Credit Card will continue to be accepted.
Consumers shop at a Toys "R" Us store in Miami. The company is now struggling with about $5 billion in debt, and hopes the bankruptcy filing can help them restructure while still keeping their stores open for the holiday season. The toy retailer represents about 10 to 20 percent of the Chinese supplier's sales. In 2005, taking the company private, Bain Capital, KKR & Co., and Vornado Realty Trust loaded it with $7.5 billion in borrowing, and the company has been hamstrung ever since.
At one point, Toys "R" Us showed signs of a turnaround.
Toys "R" Us only put certain of its businesses in bankruptcy.