Christmas is without a doubt the most lucrative time of the year for toy retailers but it seems that even the impending surge of Christmas shoppers isn’t enough to save Toys ‘R’ Us one of the worlds largest toy retailers from having to file for Bankruptcy protection in the states. Further highlighting the plight and struggle of “Brick-and-mortar” retailers.
The company made the Chapter 11 bankruptcy filing late Monday night in federal court in Richmond, Va., acknowledging that it needed to revamp its long-term debt totaling more than $5 billion.
The toy giant has faced increasing problems over the years as it struggled to compete with online retailers such as Amazon and Bargain chains in the states like Walmart.
The company faced $400 million in debt payment coming due in 2018 and was burning through its cash. It hired advisers, including the law firm Kirkland & Ellis, to help come up with a plan.
In a statement on Monday night, Toys “R” Us said the filing would help the company invest in long-term growth and “fuel its aspirations to bring play to kids everywhere and be a best friend to parents.”
Other retailers have closed thousands of stores and laid off tens of thousands of workers as they try to cut costs and compete with e-commerce.
But the company said its roughly 1,600 Toys “R” Us and Babies “R” Us stores around the world would continue to operate “as usual.”
What are your thoughts on the news that one of the biggest toy store chains in the world is in such dire straights? Do you predominantly shop online or do you enjoy strolling around an actual toy store rather than a website? As always let us know your thoughts in the comments below. And for all your daily toy, tech and gaming news, keep it here at clubit.tv