Toys 'R' Us, 'may close 200 more stores'

NEW YORK • Toys 'R' Us, the beleaguered chain under pressure from Amazon and bigger toy sellers, may close more stores as it struggles to find a path out of bankruptcy and return to financial viability.

It is not clear whether any additional closings would occur in the United States or overseas. The company operates about 800 stores in the US.

The toy retailer has not recovered from a dismal holiday selling season. Now it is under pressure to demonstrate to its lenders that it has a realistic strategy for flourishing in the ultra-competitive toy industry.

One plan under discussion includes shutting down close to 200 stores, and possibly more, according to people briefed on the matter.

Toys 'R' Us has already been taking steps to stabilise its business. Last month, it said it was shutting down 182 stores, affecting 4,500 workers.

Even as other retailers experienced strong holiday sales, Toys 'R' Us cited undisclosed "operational missteps" in explaining its poor performance.

Analysts say the company's biggest problem stems from its filing last year for Chapter 11 bankruptcy protection, after its private equity owners left it saddled with US$5 billion (S$6.6 billion) in debt.

The bankruptcy filing, only months before Christmas, left many shoppers with the impression that the firm was shutting down, even though it planned to keep all its stores operating through the holidays, said Mr Jim Silver, the editor of TTPM, a toy review website.

NYTIMES

A version of this article appeared in the print edition of The Straits Times on February 24, 2018, with the headline 'Toys 'R' Us, 'may close 200 more stores''. Print Edition | Subscribe