Toys R Us Has Officially Filed for Bankruptcy
Toys R Us has officially announced it is filing for Chapter 11 bankruptcy protection with the hopes that the popular toy store can restructure its $5 billion in debt.
The retailer issued a statement late Monday night announcing its filing, but noted that its nearly 1,600 Toys R Us and Babies R Us stores will not be affected by the bankruptcy and will remain open through the upcoming holiday season.
In a statement to the media, Toys R Us Chairman and Chief Executive Officer Dave Brandon explained that he hopes the restructuring will strengthen the company's financial position in the future.
"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," he said. "Together with our investors, our objective is to work with our debt holders 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. We are confident that these are the right steps to ensure that the iconic Toys R Us and Babies R Us brands live on for many generations."
As of right now, both Toys R Us and Babies R Us stores plan to operate as usual, meaning there are no current changes to how customers can use credit cards, gift cards or gift registries. The Toys R Us loyalty program also remains in effect and the store will continue to accept all returns and honor all warranties. While some shoppers may expect liquidation or going-out-of-business sales, the store says that for now, it will continue to hold the same sales and promotions that its shoppers have always loved.
Toys R Us isn't the only toy seller that's is struggling. The stock of Mattel and Hasbro fell 6.2% and 1.7% respectively after the news of Toys R Us' bankruptcy filing. In addition, Lego announced 1,400 layoffs last week that stemmed from a sales decline in the first half of the year.
For more information about the filing, customers can visit Toy R Us' customer FAQ page.
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