Toys R Us lays out post-bankruptcy strategy

Toys R Us lays out post-bankruptcy strategy

Toys R Us ended its almost 70-year run yesterday when the toy retailer filed for Chapter 11 bankruptcy, which came as no surprise to the industry as the company has been operating under "significant leverage" since 2007, noted by CEO David Brandon in his statement.

Even as it deals with the bankruptcy and restructuring proceedings, Toys "R" Us announced in a statement that its online and physical stores, as well as those of Babies "R" Us, will still operate normally, perThe Star Online. Major brands have also been funding an overhaul of Toys "R" Us stores by adding more featured areas for top brands such as Mattel's American Girl dolls. "Toys 'R" Us has officially filed for Chapter 11. The Toys R Us bankruptcy is a supplier nightmare, especially for those who have a smaller number of buyers, and it's a warning to those who work with traditional retailers. Either way, for '90s gamers, the company's Chapter 11 announcement is concerning news.

The surprise cancellation came on the heels of Toys "R" Us admitting on September 6 that it had hired a restructuring law firm, Kirkland & Ellis, to help it with $400 million in debt that's coming due in 2018 - a disclosure that had already spurred some vendors to halt shipments to stores. Walmart, the largest toy store in the country, claimed the second spot online with almost $1.3 billion.

At that time, Toys R Us was considered on the level with Walmart in terms of retail strength, both for its ability to drive smaller competition out of business and its vast real-estate holdings. If you're totally anxious about the company's prospects, there are lots of places to buy toys and be confident you can return them after the winter holiday if your niece really wanted a stuffed tiger instead of a giraffe.

Operations outside of the United States and Canada, including about 255 licensed stores and joint venture partnerships in Asia, which are separate entities, are not part of the bankruptcy proceedings, Toys "R" Us said. For children of the 1980s, Toys "R" Us was a mecca at the strip mall, an awe-inspiring array of dolls, trucks, board games, bikes, art supplies and much more.

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Toys R Us follows several other retail chains that have sought bankruptcy protection because of the shift in retail spending habits, including shoe chain Payless ShoeSource Inc., children's clothing seller Gymboree Corp. and jeans retailer True Religion Apparel Inc.

The company opened a temporary store in New York City's Times Square this year to capture more holiday shoppers, nearly two years after it closed its flagship store barely a block away, driven out by high rents.

Toys "R" Us also suffers from other common ills.

Toys "R" Us filed now because 40 percent of its vendors stopped shipping, unless they received cash on delivery.

The Associated Press reported that GlobalData Retail estimates that in 2016 about 13.7 percent of toy sales were made online, up from 6.5 percent five years ago.

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