With the rise in online consumer purchasing, traditional brick and mortar stores have struggled to maintain profits. Now, one of the most iconic brands in history is preparing to close their U.S. locations.
According to reports from Forbes, the famous store "Toys 'R' Us" is getting ready to shut the doors on their American storefronts. The news comes after a steady decline in profits in recent months.
"Toys 'R' Us Inc. is making preparations for a liquidation of its bankrupt U.S. operations after so far failing to find a buyer or reach a debt restructuring deal with lenders, according to people familiar with the matter. While the situation is still fluid, a shutdown of the U.S. division has become increasingly likely in recent days, said the people, who asked not to be identified because the information is private," reported Forbes.
While the news is major, it certainly isn't surprising. The store has really been in trouble for over a decade.
"The downfall of Toys 'R' Us can be traced back to a $7.5 billion leveraged buyout in 2005, when Bain Capital, KKR & Co., and Vornado Realty Trust loaded the company with debt. For years, the retailer was able to refinance its debt and delay a reckoning. But the emergence of online competitors, like Amazon.com Inc., weighed on results," read the report.
Now, the famous stores are gearing up for a massive sale before they close their doors for good. According to reports, the toy giant has launched an up to 40 percent off closing down sale in all stores in an attempt to shift stock. However, some critics claim Toys 'R' Us has purposefully marked up their prices beyond that of their competitors.
The news also comes on the heels of yet another announcement. The retailer also announced they plan to close their United Kingdon stores as well.
What do you think about this? Let us know your thoughts! Be sure to read our other breaking news article about the tragic death of a child star.