- Toys R Us is set to sell or close all of its more than 700 stores in the US.
- It officially filed liquidation papers with US Bankruptcy Court on Thursday.
- The decision threatens the jobs of the 33,000 people that Toys R Us employs.
- The retailer filed for Chapter 11 bankruptcy protection in September 2017.
Toys R Us officially filed liquidation papers early Thursday, according to USA Today.
The company told employees on Wednesday that it would sell or close all of the more than 700 stores it currently operates in the US.
In its liquidation filing, the company states that its creditors "have determined that the best way to maximize their recoveries is to liquidate the existing inventory in all ... 735 remaining U.S. stores and begin an orderly wind-down of the U.S. operations."
The motion also states that Toys R Us is projected to run out of cash in May.
The liquidation puts into question the status of the 33,000 workers Toys R Us currently employs across its stores and Wayne, New Jersey, headquarters. Their jobs are safe for at least 60 days, according to the filing.
In a conference call with employees on Wednesday, CEO David Brandon blamed some of the downfall on a devastating holiday season, when sales were less than half of the $600 million usually made in a year. Vendors scaled back shipments to the struggling chain during the holiday season, and shoppers went elsewhere.
Brandon said in the call that these vendors and shoppers "will all live to regret what's happening here," according to the Journal.
There's still some hope that some 200 Toys R Us stores could live on in a different form, according to CNBC. The company expects to find a buyer for them, along with its Canadian stores.
"I have always believed that this brand and this business should exist in the U.S.," Brandon said on the call.
The chain's UK arm announced plans to liquidate its business on Wednesday as well, and it will close its 100 stores over six months.
Stores in France, Spain, Poland, and Australia will all also liquidate. The company will seek a buyer for its Central European and Asian stores.
Toys R Us filed for Chapter 11 bankruptcy protection in September 2017. The goal was to renegotiate the company’s $5 billion debt load, which it has carried since a leveraged buyout in 2005. The company has also been slow to adapt to changing retail trends, like sales primarily driven by e-commerce and in-store innovations.
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