Tuesday in CE: Toys R Us Files for Chapter 11 Bankruptcy Protection
After months of speculation, Toys R Us announced on Monday evening that it will file for Chapter 11 bankruptcy protection. The leading (and only major national) toy retailer made the move as it looks to restructure its $5 billion in debt that it owes as a result of a leveraged buyout that happened over a decade ago.
According to CNBC, the filing will allow the company and its trio of owners to restructure $400 million in debt due in 2018, another $1.7 billion owed in 2019, and then renegotiate the remaining balance.
An important note about the filing is that Toys R Us will continue to keep open its 866 Toys R Us and Babies R Us stores here in the U.S. along with their other licensed and franchise locations around the world. In a statement, the company said that the physical retail locations are not a part of the bankruptcy filing. That’s a crucial aspect for Toys R Us as it heads into the all-important holiday shopping season, which accounted for roughly 40 percent of the company’s sales last year.