People around the country woke up to some upsetting news: Toys R Us, the largest toy store chain in the U.S., just filed for bankruptcy protection. And yeah, OK, maybe we were all partly to blame.
The company filed under Chapter 11 of the U.S. bankruptcy laws late Monday, which will allow it to stay open and protect it from creditors' claims while it restructures its long-term debt of more than $5 billion. Much of the debt came from when a trio of investment firms bought the company in 2005 and made it private.
Toys R Us faced $400 million in debt payment alone in the upcoming year and hoped this move will bring "greater financial flexibility to invest in (its) business, continue to improve the customer experience in (its) physical stores and online, and strengthen (its) competitive position in an increasingly challenging and rapidly changing retail marketplace worldwide," said Dave Brandon, chairman and chief executive officer, in a press release.
The filing highlighted an undeniable truth: We really love shopping pantsless from the convenience of our home, and the two-day (often free) shipping offers are no joke. Toys R Us, like other companies who have filed for bankruptcy protection, such as Payless ShoeSource Inc. and Gymboree Corp., have to get with the program. With Amazon, Walmart, Target and other e-commerce vendors owning the online game, the specialty retailer just isn't competing.
The company, which operates 1,695 stores (including Babies R Us) and does business in 38 countries with 64,000 employees, said its physical and web stores will operate "as usual" as it heads into the holiday season. Hopefully, it can turn things around with this latest decision.
But nostalgic consumers who will forever be Toys R Us kids are focusing on the doom and gloom behind the announcement.