Toys R Us has been struggling for months to stay in business and now multiple reports suggest the toy retailer could be calling it quits. The company could close its stores as early as next week.
Toys R Us filed for chapter 11 bankruptcy back in September, hoping to restructure the company and come back stronger than ever, but now according to multiple reports, the company is filing for Chapter 7 bankruptcy — liquidation. The toy stores could be closing its doors as soon as next week.
The rumors of liquidation are still unconfirmed but anonymous sources have given confirmation to several news organizations like USA Today, and The Wall Street Journal. Toys R Us has also pushed back its bankruptcy court date three times — another sign things aren’t going well.
Toys R Us, like many big-box stores, just couldn’t keep up with its competitors like WalMart and Amazon. As consumers do more and more of their shopping online, the big-box stores fall further and further behind. Payless ShoeSource, JC Penny, Macy’s, and Radio Shack all had to close down several locations last year.
When Toys R Us closes, the toy industry feels it. CNNMoney reports toymakers Hasbro, Mattel, and Jakks Pacific all saw their shares of their stock fall after news broke of the bankruptcy — and it comes at a bad time for the toy industry. Both Hasbro and Mattel saw a decline in sales last year, and now the toy companies are losing one of their biggest retailers. Toys R Us accounted for about 10% of the companies’ sales.