Posted: January 24, 2018
By Michelle Ewing, Cox Media Group National Content Desk
WAYNE, N.J. —
Iconic children's retailer Toys 'R' Us plans to close as many as 182 stores nationwide, the chain said in court documents Tuesday.
The New Jersey-based company, which filed for Chapter 11 bankruptcy protection in September, has about 880 U.S. stores and 1,600 worldwide, CNN Money reported.
"The reinvention of our brands requires that we make tough decisions about our priorities and focus," Dave Brandon, Toys 'R' Us chairman and CEO, said in a letter posted on the company's website. "To that end and following a top-to-bottom assessment of our business, we have decided to close a number of our U.S. stores. We also intend to convert a number of locations into co-branded Toys 'R' Us and Babies 'R' Us stores. The actions we are taking are necessary to give us the best chance to emerge from our bankruptcy proceedings as a more viable and competitive company that will provide the level of service and experience you should expect from a market leader."
If approved, "we estimate store closing sales to begin in early February, with the majority of locations closing in mid-April 2018," Brandon wrote.
Leon Neal/Getty Images
Leon Neal/Getty Images
Iconic toy retailer Toys ‘R’ Us has filed for Chapter 11 bankruptcy protection, the company announced Monday, according to CNBC.
Here are three things to know about Toys ‘R’ Us and bankruptcy protection:
1. Toys ‘R’ Us is billions of dollars in debt. The company was $5 billion in debt as of April 29, according to a USA Today report. The company saw a net loss of $164 million in the first quarter and a consolidated net sales decline of $113 million, according to the report.
2. The toy store is looking for help in restructuring, according to reports. Reports say the company has most of its seasonal merchandise, but its suppliers are withholding items until the retailer can pay cash for them right away. The company hired the law firm Kirkland and Ellis to help pay down about $400 million in debt by the year’s end, according to USA Today.
3. Chapter 11 could allow the company to keep stores open while restructuring debt. Unlike the recent Chapter 7 filing of bridal clothier Alfred Angelo, Chapter 11 bankruptcy allows a business to restructure debt without liquidating assets.
Companies like The Limited and Gander Mountain announced this year that they would file bankruptcy — shuttering stores and laying off thousands of workers.
Some of the companies to announce bankruptcies this year include the following:
1. The Limited
The women’s clothing store announced in early January that it would close all brick-and-mortar stores, and later its parent company filed for bankruptcy. The parent company of women’s clothing store The Limited filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Court, and the store website has been taken offline.
Children’s clothing retailer Gymboree Corp. filed for Chapter 11 bankruptcy protection in June, the latest sign of traditional retailers’ struggles as shoppers shun stores and buy online. The San Francisco-based company says it is seeking to reduce its debt by $900 million. It expects to operate its business and majority of its 1,300 stores during the restructuring.
The company, which owns BCBGMAXAZRIA, said in March it filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The company obtained a commitment of $45 million from loan lenders in new financing and filed its plan of reorganization.
4. Wet Seal
Teen clothing retailer Wet Seal abruptly closed all of its 148 brick-and-mortar stores in early 2017. According to a letter obtained by The Wall Street Journal, the retailer is permanently shutting down and will lay off all of its workers. The company is headquartered in California. In 2015, Wet Seal closed 338 of its 511 stores and filed for bankruptcy protection. Versa Capital then acquired the brand for $7.5 million in April 2015.
The chain retailer announced in March it was filing for bankruptcy and closing about 200 of its stores and evaluating what to do with the remaining 1,300. This isn’t the first time RadioShack has filed for bankruptcy.
Appliance store hhgregg announced in March it was closing 88 stores and laying off 1,500 employees. A month later, the company received court approval to close its remaining stores and liquidate its assets.
Sporting goods retailer Gander Mountain Co. filed for bankruptcy in March. Gander Mountain and some of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code after the retailer “experienced traffic patterns and shifts in consumer demand resulting from increased direct-to-customer sales by key vendors and accelerated growth of e-commerce,” according to a company statement.
8. MC Sports
MC Sports, legally known as Michigan Sporting Goods Distributors, announced in February its plans to begin liquidation sales of all of its 68 stores.
AGI HoldCo Inc., which owns Aerosoles stores, has filed for bankruptcy and plans to keep just four stores open in New York and New Jersey. The stores sell women’s shoes. The company expects the restructuring process to be completed in approximately four months.
Kansas-based Payless ShoeSource announced in April that it would close nearly 400 underperforming locations in the U.S. Payless’ North American entities, and two of its Hong Kong-based entities, filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Eastern District of Missouri.
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