The steady stream of large retail closures and bankruptcy filings in 2017 has slowed down over the summer months, but news this week from New Jersey-based Toys “R” Us has brought this year’s chain retail woes back into the spotlight.
The company announced on Monday that it would be “commencing court-supervised processes to implement financial restructuring,” which is an overly wordy way of saying that it is filing for bankruptcy because of $5 billion of debt.
“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,” stated Chairman and CEO Dave Brandon in a press release statement. “Together with our investors, our objective is to work with our debtholders and other creditors to restructure the $5 billion of long-term debt on our balance sheet, which will provide us with greater financial flexibility to invest in our business, continue to improve the customer experience in our physical stores and online, and strengthen our competitive position in an increasingly challenging and rapidly changing retail marketplace worldwide.”
No store closures are being announced at this point in time, and the company actually pointed out that its existing 1,600 brick-and-mortar outlets are mostly profitable. The toy company has taken a beating in the online sales race after a deal with Amazon went south in 2006 and Toys “R” Us struggled to compete against the eCommerce behemoth.
Currently, Toys “R” Us has five Central Ohio locations, as well as two Babies “R” Us stores in the market.
For more information, visit www.toysrusinc.com/restructuring.
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