Toys 'R' Us preparing to liquidate U.S. stores

Katrina Barker
March 11, 2018

Toys R Us is reportedly preparing to liquidate its assets, and it could shutter all of its USA stores as early as Monday.

Toys R Us is preparing to potentially close all of its USA stores as part of a liquidation, according to several reports.

The toy chain's U.S. division entered bankruptcy in September, planning to emerge with a leaner business model and more manageable debt.

Toys R Us had already begun liquidation sales ahead of planned store closures.

Stores outside of the USA are not affected.

Toys R Us generated $11.5 billion in sales in 2016, Bloomberg reported, but hasn't reported an annual profit since its 2013 fiscal year because of debt payments and a 22 percent increase in operating expenses.

As word spread, shares of Mattel and Hasbro, two of the world's largest toymakers, fell in after-hours trading.

According to the Wall Street Journal, the company is abandoning efforts to restructure through the bankruptcy. In many cases, a product is tested at Toys "R" Us for a season, and then added to one of the mass-market chains.

"Without a dedicated toy retailer - 365 days a year - you will see growth in the industry slow", Johnson said.

Mattel's shares fell 6 per cent to US$14.96, while those of Hasbro dipped almost 3 per cent to US$90.75 in early trading.

The falling fortunes of Toys "R" Us mirrors that of other major retail chains, most of which have fallen prey to online competition from Amazon and other outlets.

Most everyone expected Toys "R" Us to close a significant amount of stores if it wanted to successfully restructure, something CEO Dave Brandon explained to customers who were anxious about the company's future.

Other reports by AllAboutTopnews

Discuss This Article