CEO blames failure on customers and vendors
CEO Brandon claimed that the vendors and customers failed to provide sufficient support to save the company during the crucial holiday season last year. This is typically the most profitable and busiest time of year for the company. Brandon even warned that those customers and vendors would come to regret what was happening.
The closings will involve the loss of as many as 33,000 jobs.
Stores in other countries will be affected as well
Stores in France, Poland, and Australia are likely to face liquidation. However, the company is still searching for buyers of stores in Canada, Central Europe, and Asia.
Company filed for bankruptcy back in September 2017
The company has been struggling to pay down almost $8 billion in debt.
There have been reports that the company had stopped paying suppliers some of whom are the biggest toy makers in the country. The company closed all 100 of its stores in he U.K.
Toys R Us was bought by the private equity firms Kohlberg Kravis Roberts and Bain Capital together with the Vornado Realty Trust for $6 billion in a leveraged buyout back in 2005.
The company was facing a $400 million debt payment due in 2018 and was burning through its cash.
Company has failed to effectively fight off competition
Toys R Us was at one time the preeminent toy retailer in the U.S. but it has failed to keep up with big box and online competition.
The final blow was the recent holiday season which was disastrous for the company while overall the industry racked up the largest gain in years. It announced in January that it would close 182 US stores but that obviously was not sufficient to save the company.
The company, once one of the world’s largest toy chains has failed to compete with both brick and mortar stores such as Walmart and also online retail giants such as Amazon.
Toys R Us is just one of a number of retail bankruptcies in 2017 including Gymboree, a children’s clothing retailer, Payless ShoeSource and rue 21, a teenage clothing retailer. In order to compete with online and other retailers some companies have closed thousands of stores and laid off thousands of workers to cut costs and compete effectively.
