Toys R Us Files for Bankruptcy
On September 19, 2017, toy conglomerate Toys R Us filed for bankruptcy. Having fought to maintain its relevance among big box stores like Target and Walmart, and trying to compete with online retailers like Amazon, Toys R Us wracked up $5 billion in debt. The majority of this debt came from price slashes, signing exclusive deals with toy-makers, and buying other toy giants like FAO Schwartz and KB Toys. Toys R Us bankruptcy filing is concerning for many, especially brands that sell their toys within the chain. The brands fear what will happen to their products if the biggest toy store in the world goes out of business- for good.
What Does this Mean for Toys R Us?
Toys R Us expects it will continue to run its business as usual during the bankruptcy proceedings. The company says it will keep their 1,600 Toys R us and Babies R Us stores open across the world. However, it may be an unfortunate truth that, through the bankruptcy process, Toys R Us may have to close some under-performing stores. The company has $3 billion in bankruptcy financing, which it plans to use to restructure the company. Toys R Us hopes that the bankruptcy will help alleviate debt and help revamp their stores.
With children and teens tendering most of their attention to technology like video games, tablets, and phones, there is less attention to other “old-school” toys. The retail landscape over the last couple of decades has been very challenging for the toy mecca, but the brand expects that it will overcome the current challenges and come out better.
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