Big-box chain Toys R Us, which filed for bankruptcy a year ago, is planning to close or sell all 800 of its USA stores in the coming months. This comes after the company filed for bankruptcy six months ago. The company was facing a $400 million debt payment due in 2018 and was burning through its cash.
But the demise of Toys "R" Us and just about every other national toy chain means that consumers - and big toy makers like Hasbro, Mattel and Hatchimals owner Spin Master - are at the whims of giant big box retailers and, to a lesser extent, Amazon. In January it announced plans to close about 180 stores. "USA operations", Toys R Us Chairman and CEO Dave Brandon said Wednesday in a news release.
Toys R Us accounts for about 11 percent of Mattel's annual sales and about 9 percent of Hasbro's annual volume, analysts estimate.
The sales during the recent holiday period are believed to be very bad.
Toys R Us is seeking bankruptcy court approval to shut down its hundreds of remaining stores in the USA and Puerto Rico following dismal sales during the crucial holiday shopping season.
Probably not. Toys R Us is looking for a buyer for its Canadian arm - which is in better financial shape than the company's USA operations - and it still has stores in central Europe and Japan.
Customers should also be aware that they have only 30 days to use gift cards at the stores, according to a report from USA Today.
In Canada, Brandon said, Toys R Us will try to bundle its roughly 200 stores and seek a buyer. Company filed for bankruptcy back in September 2017 The company has been struggling to pay down nearly $8 billion in debt.
The Wayne, N.J. -based retailer is still exploring options for selling its stronger Canadian business, including a plan that would save up to 200 top-performing US stores as part of that deal. It doesn't offer the low prices or convenience of some of its larger competitors, nor the fun-filled experience that many smaller outfits do, some analysts have said.
Toys "R" Us bought FAO Schwarz in 2009 but it was later sold to consumer products company ThreeSixtyGroup in 2016. At the time, the struggling retailer sounded optimistic about a turnaround, and it secured a loan of more than $3 billion to keep business going during restructuring.
"The liquidation of Toys R Us is the unfortunate but inevitable conclusion of a retailer that lost its way", Neil Saunders, managing director of the research firm GlobalData Retail, wrote in an email.
In Hong Kong, where Toys R Us has 15 stores, parents said there were few other choices in a retail market dominated by a few big players. "The brand lost relevance, customers and ultimately sales". She assumes that even after stores close, toysrus.com will be up and running for quite some time.
They also got about 10% of their revenue from Toys "R" Us.