Toys "R" Us files for bankruptcy protection in Canada

20 September, 2017, 03:55 | Author: Leticia Walters
  • Pinole California. Toys R' Us announced that it has filed for Chapter 11 bankruptcy. The toy store chain operates 1,695 stores incl

Toys "R" Us, the world's leading retailer dedicated to toy and baby products, filed for chapter 11 bankruptcy protection late Monday night due to a debt load and severe competition from online retailers.

Toyrs "R" Us said Tuesday it has filed for Chapter 11 reorganization in U.S. Bankruptcy Court.

The filing, meant to restructure five billion dollars of long-term debt, is one of the largest ever by a specialty retailer and casts doubt over the future of the company's 64,000 employees and almost 1,600 stores, which remain open as of now.

Melanie Teed-Murch, President of Toys " R " Us and Babies " R " Us Canada, commented, "The restructuring is meant to facilitate the continued success of our iconic brands; building a stronger company for our customers, business partners and team members". It said it had lined up $3.0 billion in financing and that its stores and websites were open and operating normally.

A customer walks into a Toys R Us store in Dallas, Tuesday, Sept. 19, 2017.

The company, which is headquartered in Wayne, N.J., and has almost 65,000 employees worldwide, says it is committed to working with its vendors to ensure inventory levels are maintained and products continue to be delivered.

Toys "R" Us said it expects to survive.

The filing - just the latest in a string of high-profile bankruptcies this year - comes on the heels of the all-important holiday shopping season, which can account for half of retailers' annual sales.

Toys "R" Us is now owned by three companies - private equity firms Kohlberg Kravis Roberts and Bain Capital, and real estate firm Vornado Realty Trust - that purchased it for about $6 billion in 2005.

'It is hard to see how Toys R Us could address the challenges it faces without reducing its store footprint and significantly changing its proposition'.

Retailers of all kinds are struggling, including Sears Canada, which has since closed more than 60 of its locations across B.C., laying off thousands of employees.

To compete with e-commerce giants, traditional retailers as Toys "R" Us would have needed to slash prices to stay on the track.

The bankruptcies of almost three dozen retailers since the beginning of the year - many of them very small companies, but also well-known names like Payless Shoe Source, Gymboree Corp. and True Religion jeans - has resulted in job losses and store closings.

But Matthew Hudak, a senior toys and games analyst at Euromonitor International, said the company would struggle to cash in on trends in toy sales.

Meanwhile, children are increasingly gravitating towards digital toys rather than physical trinkets, he added.

Toys "R" Us, a major force in toy retailing in the 1980s and early 1990s, started losing shoppers to discounters like Walmart and Target and then to Amazon.

GlobalData Retail estimates that about 13.7 percent of toy sales were made online in 2016, up from 6.5 percent five years ago. US toy sales rose 6 per cent last year on top of a seven per cent increase in the prior year, says NPD Group Inc., a market research firm.

The company said its Canadian unit intends to seek protection in parallel proceedings under the Companies' Creditors Arrangement Act (CCAA) in the Ontario Superior Court of Justice. That was the biggest increase since 1999 and was fuelled by several blockbuster movies.



Lewis Hamilton won the Singapore Grand Prix
Vettel claimed he had no idea how the collision occurred, but Verstappen was quick to point the finger in his direction. The first lap incident left Verstappen , who has now had seven retirements this season, unimpressed with Vettel .

A Charity Just Rented Trump's Childhood Home For Refugees
The White House has been mired in internal debates over the amount of refugees to allow into the USA during the next fiscal year. A suppressed report indicates all immigration is a positive economic benefit to the US , but the administration isn't buying it.

Netanyahu, Egypt's Sissi Hold Talks on Regional Turmoil
Trump too met Netanyahu in NY on Monday ahead of the UN General Assembly and again expressed his hopes for a peaceful settlement. Netanyahu himself has touted his expanding contacts with them, the news of a friendly get-together with Sisi created no stir.

Waves from Jose causing problems on Hatteras Island
Some areas in the city will also get hit with winds of up to 30 miles per hour , based on the current projections. Hurricane Jose is headed up the Atlantic Coast, though New York City is not expected to take a direct hit.

IPhone X to cannibalise iPhone 8 orders: Top analyst
Kuo has predicted that the iPhone X will be limited this year and the supply-demand would achieve equilibrium only in 2018. The American phone-maker has already announced that iPhone 8 and iPhone 8 Plus will go on sale in India from September 29.