As the holiday season is on its way, children may not get to spend their time at Toys ‘R’ Us this year. According to a report, it the retailer is set to file for bankruptcy just before the holidays begin.
Now that’s not a season’s greetings. The Reuters and the Wall Street Journal had first broken the news on this franchise’s fall. Their reports say that the retailer will be forced to file for bankruptcy in a few weeks’ time. Toys ‘R’ Us has is put under strict guidelines by all its suppliers, and the contract fallouts are to put the store in a very tight spot.
Toys ‘R’ Us is not new to the event of strapped cash, but their decline will sadden and even depress many nostalgic collectors. The retailer could not keep up with the toy market as online shops such like Amazon were growing. With more toys being filtered into shops like Walmart, Toys ‘R’ Us had failed to show why their specialty stock matters and why the consumers have to get their product.
If Toys ‘R’ Us files for bankruptcy, the franchise will be the biggest to have a fall this year. The brand has around $5 billion in debt amongst all its 1,600-plus stores in the US.
Toys ‘R’ Us may even consider filing for Chapter 11 protection with the US Bankruptcy Court. The franchise has to first obtain loans of a few hundred million dollars, and this will ensure the retailer’s vendors will be paid for merchandise stores plans to sell during the holiday season if the protection gets approved.
Over the past few years, their vendors have placed strict repayment terms as they feared the retailer might go bankrupt before the contracts get fulfilled. The tighter oversights paired with a dynamic market has got the franchise in hot water.
So, Toys ‘R’ Us and parents better get ready. This may be the last year that the chain opens its door to frantic shoppers.
