Toy store chain Toys R Us has announced plans to sell or close all 800 of its U.S. stores. The company also announced it would close all 100 of its U.K. stores as well as its stores in Canada. The retailer is also likely to liquidate in France, Spain, Poland, and Australia.
The company was already working with liquidators Tiger Capital Group LLC, Great American Group LLC, Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC on previously announced store closures and will continue working with them on all the closures. The company said the United States closures would likely occur over time, not all at once. The stores in the U.K. will close within six weeks
Toys R Us Chief Executive David Brandon reportedly told U.S. staff about the closures on a conference call this week. The move would affect as many as 33,000 jobs across the country. Sen. Charles E. Schumer (D-N.Y.) has urged the Federal Trade Commission to “take an immediate look” at how Toys R Us is handling the winding down of its operations.
After six decades as one of the premiere retailers in America, the company has lost its struggle to rebuild its fortunes. Its ubiquitous icon, Geoffrey the Giraffe, and its catchy jingle were well known around the world. Unfortunately, the retailer was unable to keep up with its big-box and online competitors.
Despite turnaround efforts, the company has been unable to get customers back into its stores. The chain’s situation was made worse by disappointing holiday sales. Three-quarters of sales in the toy business takes place during the holidays.
The move to liquidate comes after the company failed to reach a deal to restructure billions of dollars in debt. The retailer filed for bankruptcy protection six months ago. Creditors have apparently decided they can get more from liquidating the company’s assets than finding a way to keep the business alive.
The Toys R Us bankruptcy filing last year cited $7.9 billion in debt against $6.6 billion in assets.
The company reports having more than 100,000 creditors. Toymakers Mattel and Hasbro are among the company’s biggest unsecured creditors. According to court documents, Mattel is owed more than $135 million, while Hasbro is owed $59 million. Reports published earlier this week claimed that Toys R Us has stopped paying its suppliers.