Toys 'R' Us bankruptcy: What about my gift cards?

Toys 'R' Us bankruptcy: What about my gift cards?

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.

For its part, the company said it doesn't plan to close stores and will continue normal operations at its namesake outlets, as well as Babies "R" Us, and their websites.

Toys'R'Us has assured its stores will remain open after filing for bankruptcy protection in the United States and Canada ahead of the crucial festive season amid mammoth debts and increasing online competition.

The company listed debt and assets of more than USD1 billion each in Chapter 11 documents submitted Monday at the U.S. Bankruptcy Court in Richmond, Virginia. 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.

They were concerned the company would not pay them because of its financial distress, but those worries were put to rest once Toys "R" Us secured bankruptcy financing on Tuesday.

The company's Canadian unit intends to seek protection in parallel proceedings, it said in a statement.

Meanwhile, the filing of Toys "R" Us' bankruptcy raised people's attention on what would be the future trend of retail industry. If Toys "R" Us can emerge from bankruptcy with less debt plus money to reinvest in its business, the process could mark a turning point.

Just because a company files for Chapter 11 protection, that doesn't mean it will be closing its doors.




But like many brick-and-mortar retailers, Toys R Us was overwhelmed by consumers' rapid shift to buying goods on the internet at sites such as Amazon.com and the severe price competition from those sites.

The group is also revamping its flagship stores in Bristol and Brent Cross shopping centre in London. Chief Executive Officer Dave Brandon about 36 hours after filing for bankruptcy was simple: The world's biggest toy chain will come out stronger.

Toys "R" Us also suffers from other common ills.

With our favourite toy store filing for bankruptcy protection, are we slowly becoming a generation that replaces Hot Wheels, Legos and Unos with iPads and laptops?

"Mastermind continues to meet the increasing demand for high-quality specialty toys and children's books in underserved markets, and we look forward to introducing our brand to more and more Canadian families as the company continues to grow".

"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.

Second, Toys "R" Us has not helped itself. Sales of fidget spinners, a toy that has become ubiquitous in the past year, got twirling online first. Toys " R " Us, Inc.is headquartered in Wayne, NJ, and has almost 65,000 employees worldwide.

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