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Toys `R' Us to liquidate as retailer's turnaround collapses
Toys “R” Us Inc. is going out of business and could shut down hundreds of stores around the world and jeopardize tens of thousands of jobs.
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This file photo taken on Dec. 19, 2017 shows a woman shopping at a Toys R Us store in Alhambra, California. Toys 'R' US plans to sell or close all of its US stores, potentially hitting 33,000 jobs, US media reported on March 14, 2018.
(AFP/Frederic J. Brown)
T
oys “R” Us Inc., the ultimate toyland for baby boomers and their kids, is going out of business after a failed rescue effort, unable recover from intense competition and crushing debts.
The collapse, disclosed in a statement Thursday, could shut down hundreds of stores around the world and jeopardize tens of thousands of jobs. Toys “R” Us filed for bankruptcy in September with a plan to turn around the unprofitable retailer. But sales sputtered during the crucial holiday season, and Bloomberg reported that the company began missing payments to some suppliers in recent days, all but sealing its fate.
Toys “R” Us filed a motion seeking Bankruptcy Court approval to begin winding down its US business, according to the statement. The company is also pursuing a reorganization and sale process for its Canadian and international operations in Asia and Central Europe. Toys “R” Us said it is engaged in discussions with interested parties for a transaction that could combine as many as 200 of its top performing US stores with its Canadian operations.
“I am very disappointed with the result, but we no longer have the financial support to continue the company’s US operations,” Chief Executive Officer Dave Brandon said in the statement. “We are therefore implementing an orderly process to shutter our US operations and will pursue going concern sales or reorganizations of certain of our international businesses, while our other international businesses consider their options.”
The merchant is among the latest and largest victims of the retail apocalypse that has already felled a host of traditional brick-and-mortar stores, including Sports Authority, Gymboree and Payless. Toys "R" Us suffered as giant discount stores such as Walmart Inc. sold the most popular toys at steep markdowns to lure shoppers into the aisles, and more price pressure came from the advent of online merchants such as Amazon.com Inc.
The company’s official history says it was founded by Charles P. Lazarus, who got his start in his father’s bicycle shop and later opened Children’s Bargain Town in Washington, D.C., after coming home from World War II. The Toys "R" Us logo followed in the late 1950s with a backwards "R" to give the impression that a child wrote it.
