Updated September 19, 2017: Following speculation earlier this month, Toys "R" Us has filed Chapter 11 bankuptcy protection on Monday evening as it attempts to address its looming $5b debt - including $800m of which will be due for repayment in 2018.
“Today marks the dawn of a new era at Toys ‘R’ Us where we expect that the financial constraints that have held us back will be addressed in a lasting and effective way,” Dave Brandon, chairman and chief executive of Toys “R” Us, said in a statement. “We are confident these are the right steps to ensure that the iconic Toys ‘R’ Us and Babies ‘R’ Us brands live on for many generations.”
Brandon says that the Toys "R" Us and Babies "R" Us locations would remain continue to run "as usual" during this process. This news comes just months before the holiday shopping season.
"[The filing] brings to a close a turbulent chapter in the iconic company’s history,” Neil Saunders, managing director of GlobalData Retail, said in an email to The Washington Post. “Even if the debt issues are solved, Toys ‘R’ Us still faces massive structural challenges against which it must battle. The jury is out as to whether it can adapt enough to survive.”
The company's second quarter earnings report is scheduled to be released September 26.
Original Story: The big box toy giant Toys "R" Us has $400m in debt due in 2018, and is exploring options to resolve the issue - including filing for bankruptcy, according to CNBC. The retailer reported a 3.4% drop in year-to-year holiday sales in 2016 and a $164m net loss in Q1 2017.
"As we previously discussed on our first quarter earnings call, Toys R Us is evaluating a range of alternatives to address our 2018 debt maturities, which may include the possibility of obtaining additional financing," Toys "R" Us spokeswoman Amy von Walter said. "We expect to provide an update about these activities, as well as the many initiatives underway to provide an outstanding customer experience in our global retail locations and webstore during the holiday season, during our second quarter earnings call."
That earnings call is scheduled to take place on September 26.
Founded in 1948 by Charles Lazarus, Toys "R" Us currently owns and operates over 1,500 locations across the world. The company was purchased in 2005 by Kohlberg Kravis Roberts, Bain Capital Partners, and Vornado Realty Trust in a deal valued at $6.6 billion. In 2010 the company pursued the option of going public, but cancelled those plans citing challenging market conditions.