On Monday, September 18th, media sources announced that one of the most popular toy stores—Toys “R” Us—could file for bankruptcy very soon. Later on the same day, the company officially confirmed that they are indeed filing for Chapter 11 bankruptcy in hopes of relieving debt and furthering company growth in the future.
In a statement on their website, Toys “R” Us, Inc. announced its court filing and revealed, “The Company intends to use these court-supervised proceedings to restructure its outstanding debt and establish a sustainable capital structure that will enable it to invest in long-term growth and fuel its aspirations to bring play to kids everywhere and be a best friend to parents.”
The company currently operates over 1,500 Toys “R” Us and Babies “R” Us stores internationally. In the meantime, this bankruptcy filing does not affect the operation of any of these retail stores or the avenue for online shopping.
After this sudden announcement, consumers were, of course, concerned about gift cards and loyalty programs. Time reported that the company will continue to honor all gift cards and loyalty points as usual, especially with the holiday season right around the corner.
Toys “R” Us most likely joins many other retailers in facing the issue of the growth of e-commerce. Many consumers prefer the online convenience and flexibility compared to in-store shopping.
Fortunately, Toys “R” Us has not yet announced any store closures. However, other large retail chains have begun closure processes recently in relation to the e-commerce problem including Rue21, Payless Shoes, Sears, and Gymboree.
What do you think about this? Share your thoughts in our Facebook comments. In other family news, parents were just warned about a classic children’s toy posing a serious danger to kids.