Toys “R” Us is considering shutting down and liquidating its U.S. operations. Saddled with a $4.9 billion debt and consumers shifting to online shopping, the toy retailing giant filed for bankruptcy last September — the third largest retail bankruptcy in U.S. history. However, the company failed to meet the expectations of its debt restructuring agreement including securing a buyer and finding lenders to agree with the restructuring terms.
Even with the $3.1 billion loan it obtained to stay afloat, recent poor holidays sales further compounded its situation and raised doubts about the company’s viability.
Back in 2013, Toys”R” Us withdrew its IPO registration following declining sales. That same year, The Harris Poll found that one-third of toy purchasers were spending less on toys than the year prior. We also discovered that only one in ten Americans (11%) purchased their toys from a national toy store retail chain.
Toy “R” Us liquidating its U.S. division will be a big blow to the industry as the retail chain accounts for 15% of toy sales in the country.