Toys ‘R’ Us, the toy retailer struggling with $5 billion (R66bn) in debt and intense online competition, has filed for bankruptcy protection ahead of the key holiday shopping season.
The company said the proceedings are under way for Toys ‘R’ Us to work with its creditors on restructuring debt. It emphasised that its stores worldwide will remain open and it will work with suppliers and sell merchandise.
Filing for bankruptcy protection “will provide us with greater financial flexibility to invest in our business and strengthen our competitive position in an increasingly challenging and rapidly changing retail marketplace worldwide,” chairman and chief executive Dave Brandon said.
The move comes at a critical time leading into the holiday season that is crucial to retailers’ bottom lines.
The company said it was “well stocked as we prepare for the holiday season and are excited about upcoming in-store events.”
Toys ‘R’ Us has struggled with debt since private equity firms Bain Capital, KKR & Co and Vornado Realty Trust took it private in a $6.6bn buyout in 2005.