Toys “R” Us to Close Underperforming US Stores

Regrettably, Toys “R” Us’ United States chapter has come to an abrupt ending, after the company announced the liquidation of all its US-based store. Citing massive debt, the company intends to close approximately 180 physical stores across the country. The change is due to be implemented during the upcoming month.

Toys “R” Us Hounded by Creditors and Failed Leveraged Buyout

Recently, during a press conference, a Toys “R” Us spokesperson announced that the company’s board has decided to vote in favor of closing down the US branch. News of Toys “R” Us’ decision to close down the shop did not come as a surprise to investor and creditors, as the company filed for bankruptcy back in September.

Although Toys “R” Us’ demise was inevitable, the company managed to shield itself from the creditors, at least for the duration of the winter holidays. Still, according to the reports issued at the beginning of January, the company was crushed in the competition by Amazon and other online-based stores who invested heavily in the e-commerce branch.

As a result, the company board has announced that in the day to come, approximately 180 Toys “R” Us stores, found to be underperforming, will be closed down indefinitely.

Economic analysts have declared that company’s downfall began almost a decade ago after it was involved the leveraged buyout that featured two private equity firms –  KKR & Co. and Bain Capital. After the buyout, Toys “R” Us managed to rake up a whopping $6.6 billion debt which it could not pay even today.

Another theory regarding the company’s decision to close the United States chapter would be that compared to competitor chains such as Walmart and Amazon, Toys “R” Us vehemently refused to divert funds and to develop its e-commerce branch.

We should see the last of the company’s store close down as soon as the beginning of March.

Image source: Flickr

Leave a Reply

Your email address will not be published. Required fields are marked *