Is Toys R Us Closing? Does Bankruptcy Mean Going Out of Business?

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Toys "R" Us has been keen to let customers know that the "vast majority" of its approximately 1,600 stores around the world and its web portals will continue to operate as usual.

He said: "Alarm bells will have been ringing for some time but it took until May this year for an online store revamp to take effect and it is hard to see how Toys'R'Us could address the structural challenges it faced without reducing it's store footprint and significantly changing its proposition". Toys R Us, like other companies who have filed for bankruptcy protection, such as Payless ShoeSource Inc. and Gymboree Corp., have to get with the program.

Toys'R Us plans to emerge from Chapter 11 protection in much better shape to take on competing retailers online and offline.

The company is saddled with debt from a $6.6 billion buyout in 2005 led by KKR & Co LP and Bain Capital LP, together with real estate investment trust Vornado Realty Trust.

They were concerned the company would not pay them because of its financial distress, but those worries were put to rest once Toys "R" Us secured bankruptcy financing on Tuesday. Toys R Us said its Canadian unit also meant to seek reorganization in the bankruptcy court in Ontario.

The move comes at a critical time leading into the holiday season that is crucial to retailers' bottom lines.




"I've always said that if there's no Toys "R" Us, there is no toy business". The chapter 11 protections will help out the company during the upcoming holiday season.

Toys "R" Us bankruptcy is partly caused by falling foot traffic in malls in the U.S.

Many of them noticed when on September 18th, the chain filed for bankruptcy. Its woes began in the 1990s, as big-box stores grew both in number and in size.

"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", said Dave Brandon, chairman and chief executive officer.

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. 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. Similarly, KB Toys perished, and Toys "R" Us will likely limp along.

Toys R Us traces its roots to 1948, when founder Charles Lazarus opened a baby furniture store in Washington. Toys "R" Us backed MGA's collectible L.O.L. Surprise Dolls, making a big order, placing it at the front of stores in January. Toys " R " Us, Inc.is headquartered in Wayne, NJ, and has almost 65,000 employees worldwide. In the early 1990s, sales grew at a 10 percent annual clip; a year ago, they dipped 2.2 percent.

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