Once the go-to store for toys, Toys 'R' Us is now set to close more than 700 stores, affecting some 30,000 employees. The company sold major brands including Barbie maker Mattel, Lego and board game company Hasbro.
Toys 'R' Us on Thursday announced it would close all its US stores after being unable find a buyer or reach a deal to restructure billions of dollars in debt.
"This is a profoundly sad day for us as well as the millions of kids and families who we have served for the past 70 years," CEO Dave Brandon said in a statement.
"I am very disappointed with the result, but we no longer have the financial support to continue the company's US operations," he added.
Toys 'R' Us filed for bankruptcy protection - called Chapter 11 in the US - in September and was already in the process of closing one-fifth of its stores in an attempt to save the business.
The company had huge debts as the result of a $6.6-billion (€5.3 billion) leveraged buyout in 2005 by a consortium that included the KKR Group and Bain Capital. Toys 'R' Us was taken private, with a view to take it back to the stock market after a restructuring period.
The closure of the 70-year-old retailer in the US will affect some 30,000 employees.
A possible savior?
Similar to other stores, Toys 'R' Us has suffered due to competition from online retailers such as Amazon.
In a last-ditch attempt to save the company, Toys 'R' Us is "in discussions with certain interested parties" regarding a transaction that could see 200 of the top-performing US stores combined with its Canadian operations, Brandon said.
But while discussions take place, the company has sought court approval for the liquidation of its US stores with the right to recall any stores included in the proposed Canadian transaction.
More stores to close
In February, the company's British unit announced plans for an "orderly wind-down" of its store portfolio. Toys 'R' Us employs 3,200 people at 100 stores in the UK.
According to the Thursday statement, the company is also pursuing a "going concern" reorganization and sale process for its Canadian and international operations in Asia and Central Europe, including Germany, Austria and Switzerland.
"The Company's international operations in Australia, France, Poland, Portugal and Spain are considering their options in light of this announcement," the statement said.
Toyr 'R' Us founder Charles Lazarus started his business in 1948 in Washington, D.C., amid the postwar US economic boom. The company has almost 65,000 employees globally, according to a company press release in February.
law/ng (AFP, Reuters)