Toys ‘R’ Us files for bankruptcy in the US
Toy retailer Toys ‘R’ Us has filed for bankruptcy in the US and Canada as it attempts to restructure its debt.
Two weeks ago it hired lawyers to explore restructuring options, including bankruptcy. It has 1,600 shops worldwide, and is struggling with a debt of more than $5bn (£3.7bn) as it faces competition from the likes of Amazon and online retailers.
The firm’s operations in Australia and Europe and its joint venture in Asia are not park of the bankruptcy proceedings.
Toy retailer Toys ‘R’ Us has filed for bankruptcy in the US and Canada as it attempts to restructure its debt.
Two weeks ago it hired lawyers to explore restructuring options, including bankruptcy. It has 1,600 shops worldwide, and is struggling with a debt of more than $5bn (£3.7bn) as it faces competition from the likes of Amazon and online retailers.
The firm’s operations in Australia and Europe and its joint venture in Asia are not park of the bankruptcy proceedings.
However, the company said that it had already received a commitment for more than $3bn in financing from a lending syndicate, which could improve the company’s financial and operational health.
In a statement, chairman and chief executive Dave Brandon said: “Today marks the dawn of a new era at Toys ‘R’ Us where we expect that the financial constraints that have held us back will be addressed in a lasting and effective way.
“Together with our investors, our objective is to work with our debt-holders and other creditors to restructure the $5bn of long-term debt on our balance sheet, which will provide us with greater financial flexibility to invest in our business, continue to improve the customer experience in our physical stores and online, and strengthen our competitive position.”
The UK brand of the business, which operates as a subsidiary, is not affected. However, the company in the UK is similarly looking to improve its balance sheet in the face of online competition and is looking to reduce the size of its real estate portfolio.
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