Toys ‘R’ Us Inc. filed for chapter 11 bankruptcy protection yesterday, undone by a hefty debt load and the rapid shift to online shopping, the Wall Street Journal reported today. As part of the restructuring process, Toys ‘R’ Us plans to close some underperforming stores. Its remaining locations would be reconfigured to be more experienced-based, incorporating amenities such as in-store play areas. The company expects most of its stores will be open for the holidays and it will use $3 billion in bankruptcy financing to continue buying merchandise and funding its operations. The company, which operates about 1,600 stores around the world, was a classic example of a “category killer,” a huge specialty store with low prices that squeezed independent shops. It swallowed up several rivals that have themselves filed for bankruptcy protection, including FAO Schwarz and Kay Bee Toys, a mall-based chain that liquidated hundreds of stores before it was sold. Read more. (Subscription required.)
What does the future hold for retail bankruptcies? Be sure to attend ABI’s Bankruptcy 2017: Views from the Bench on October 17.
