Toys R Us considering bankruptcy

The long standing US toy retailer, Toys R Us, is taking advice on whether to file for bankruptcy.

Toys R Us has been in financial difficulty for a number of years, with almost $400 million in debt. License Mag reports that restructuring advisers have been bought in in an attempt to plot a course forward for the troubled big box retailer.

Bankruptcy is one option being explored by the dedicated toy retailer, the article confirms:

The company is already working with the financial advisory firm Lazard and successfully refinanced some of its debt just a year ago. However, with the roster of retail bankruptcies growing, many lenders are becoming less accommodating.

“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 in a statement on Wednesday. “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.”



Industry experts have noted causes for concern for years, in particular in the last two.

The first sign of real trouble was back in 2015 when Toys ‘R’ Us closed its destination flagship in Times Square to save money on rent. Just last month though, the retailer announced plans for a 35,000-square-foot pop-up in the same neighborhood for the holiday season.

Following a disappointing 2016 holiday season, where same store sales dropped 3.4 percent, the retailer reported a net loss of $164 million in the first fiscal quarter of 2017. Toys ‘R’ Us will release is second quarter earnings on Sept. 26.

Toys R Us is the only chain of dedicated toy retailers left in the USA.


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