Toys R Us is reportedly in its death throes, and liquidation of all its U.S. assets is looking like the most likely outcome, according to a new report in Bloomberg, which cited anonymous sources. That quick descent meant the retailer entered bankruptcy without a plan for how to restructure its debt, which made finding a way to exit more hard. Speculators suggest a shutdown of the company's US operations could happen within days.
Toys "R" Us was founded in 1948 and grew into the largest toy store chain.
According to Bloomberg, the company has failed to find a buyer or reach a debt structuring deal with lenders.
Toys R Us is reportedly making preparations to liquidate all of its stores in the United States. The report cites anonymous sources close to the company. The toy chain accounts of 10 percent of sales for both toy companies.
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Toys "R" us was founded in 1948 in Washington, D.C. It now employs about 64,000 people. Bigger rivals like Walmart Inc. and Target Corp. would typically take a more cautious approach. Those stores were expected to close by the end of April. "I don't think people will miss Toys R Us" if it goes out of business "because everything you can get at Toys R Us, you can get online".
That buyout, by private equity investors Bain Capital and KKR, and real estate trust Vornado, saddled Toys with crushing interest payments amounting to $400 million a year, just as the economy was entering its worst downturn since the Great Depression. After filing for bankruptcy and taking on a $3.1 billion loan to keep stores open during corporate restructuring, anonymous insiders have told Fortune that the company's outlook has become grim in the past few days.
The store also wanted to give employees the freedom to remove products from boxes to let kids play with the latest toys.