Toys 'R' Us preparing to liquidate United States stores

Toys 'R' Us preparing to liquidate United States stores

Toys 'R' Us preparing to liquidate United States stores

Several sources, including Reuters, CNN, Bloomberg and Fortune are reporting Toys "R" Us might liquidate its assets and shut down all of its USA stores.

The company has struggled to find a buyer or reach a debt-restructuring deal with lenders, leaving it with few options.

The company had previously announced plans to close 182 USA stores, including a Babies " R " Us in Jacksonville, after entering bankruptcy in September.

Toys "R" Us has already begun the process of closing its stores in the United Kingdom. Around three dozen retailers sought bankruptcy protection a year ago due in large part to a radical shift in consumer behavior, both in where they shop, and what they buy.

A new US$3.1 billion loan was obtained to keep the stores open during the turnaround effort, but results worsened more than expected during the Christmas holidays, casting doubt on the chain's viability.

The remaining stores across the US are making preparations for liquidation. The closings would affect a fifth of the Toys "R" Us stores in the country.

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Krystina McNamara looks forward to driving over an hour into Grand Rapids, to bring her daughter to Toys R Us.

Both large and small toymakers were affected by the news.

The decision to close all 800 USA stores is not final and could change if a turnaround plan is announced.

One company that could benefit from the model: Toys R Us.

"The worst case scenario is that about 10 percent of the sales of each of the toy companies goes away in 2018, with an associated roughly 10 percent hit to earnings", D.A. Davidson analyst Linda Weiser said. Last September, the company filed for Chapter 11 bankruptcy.

If Toys R Us survived in some form, "it would be very the toy industry", Storch said.

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