Toy R Us’ Bankruptcy Leads To Closing Down of 800 Stores

The toy store chain Toy R Us is in the process to either sell off or close all of its 800 U.S based stores after six decades of operations. The decision has almost 33,000 jobs at stake as the company decides to wind up their business.

Around six months earlier, the company had been filed for bankruptcy. The retailer has been struggling to cover their debt amounting to almost $8 billion most of which is a leveraged buyout of equity firms in 2005 and has trouble finding a buyer. A week early reports show the company’s inability to pay for its creditors and suppliers including the largest toy makers of the economy. On Wednesday, the company announced closing down 100 of their stores in the United Kingdom. However, in case of the United States, the company informed the closures will not be all at once, but a gradual process.

The growth and popularity of online shopping such as the have made competition too rigorous for the retail store coping with their financial liabilities. The recent blow out for the company was their inability to stay competitive in the holiday season because their prices were still higher than those of the online competition even if the retail industry had a massive gain during the year.

This is a profoundly sad day for us as well as the millions of kids and families who we have served for the past 70 years”

-Chief Executive Officer Dave Brandon

In January, the store chain had announced the closure of 182 stores in the US or closing down one-fifth of its remaining Toys R Us and Babies R Us locations. In Asia and Central Europe together with Germany, Switzerland and Austria, the company will go for reorganisation and sale procedure. However, the UK business will continue its operations.

The company went into liquidation when the creditors proposed closing down to be beneficial covering the existing debts rather than restructuring the business regarding its decreasing market and inability to build up competitiveness in this rivalry. Moreover, the closing of the company was not exciting even if they had significant discounts as the prices were still higher than the online rivals.


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