Toys R Us Files For Bankruptcy Due To Debt; Stores Will Remain Open, However
Toys R Us is one of the biggest (if not the biggest) toy retailer in the world, but due to a massive debt of $5 Billion, the company is said to be filing for bankruptcy. The good news is, the stores will remain open, and it’s business as usual for the upcoming holiday season.
According to the Chicago Tribune, CEO Dave Brandon said:
“[Filing for bankruptcy protection] will provide us with greater financial flexibility to invest in our business ... and strengthen our competitive position in an increasingly challenging and rapidly changing retail marketplace worldwide."
With the upcoming holiday season a critical time for retailers, Toys R Us is still “well stocked” and prepared, and they are also gearing up for some in-store events.
With a number of customers moving on from traditional retailing to shopping online, Toys R Us is joining a list of other companies who are having trouble competing which include Payless Shoe Source, True Religion jeans, and Gymboree Corp.
It also doesn’t help that more and more kids are moving on to electronics for fun instead of traditional toys.
According to managing director of GlobalData Retail Neil Saunders, even if Toys R Us is able to handle its debt problems, that doesn’t mean the toy giant is out of the dark. He explains:
"Toys R Us had little choice but to restructure and try to put itself on a firmer footing… even if the debt issues are solved, Toys R Us still faces massive structural challenges against which it must battle."