Toys "R" Us bankruptcy: Toy chain files Chapter 11; Will stores close?

Toys

Already on Monday the Wall Street Journal reported that the company was within weeks of filing for bankruptcy.

Amy von Walter, executive vice president of the company's communications department, told Metro US: 'It's important to note that we did not announce any stores closures.

Global toy giant Toys "R" Us - which has ten stores in Scotland - is considering filing for bankruptcy before Christmas, according to reports.

"Together with our investors, our objective is to work with our debt holders and other creditors to restructure the $5 billion of long-term debut on our balance sheet".

There are 1,600 stores around the world and the company says they will continue to operate as usual.

The New Jersey-based chain has secured more than £2.2 billion in financing from a syndicate of lenders to help keep its stores open.




In a statement, the global toy retailer said that it would be "business as usual" for its United Kingdom operation, with its four outlets in Northern Ireland unaffected. From November and December alone, retailers like Toys "R" Us have the potential of making almost half of their average annual revenue.

Toys "R" Us locations outside the U.S. and Canada in the UK, Australia and Asia are not set to be affected by the bankruptcy filing.

The move comes as part of its potential plan to restructure around $400 million in debt, which is due in 2018.

Restructuring that debt would give Toys R Us the financial flexibility to continue its turnaround. The two largest toy makers - Mattel and Hasbro - are owed almost $200 million combined from Toys "R" Us, the paper reports. According to Reuters, more than a dozen notable retail chains have filed for bankruptcy so far this year in the US. Babies "R" Us, the brand which deals with toys and products exclusively for babies, is also planning to enter India soon.

Toys "R" Us have over the years struggled with the rise of Wal-Mart Stores and Target Corp and Amazon.com.

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