World News

Toys ‘R’ Us Filed for Bankruptcy This Week

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On Monday, stated that mixed reports were coming in regarding Toys “R” Us filing for bankruptcy right before the critical time of year when toy stores start preparing for the holiday season. Now, news outlets like the New York Times are confirming the rumors. Toys “R” Us did in fact file for Chapter 11 bankruptcy late Monday night in Virginia.

The company has struggled to get out from under their debt which totaled over $5 billion, and competing with Amazon and Walmart has also been a major hurdle for the toy store. They intend on carrying on with business as usual with their Toys “R” Us and Babies “R” Us stores around the world since lenders will give them $3 billion to pay their employees and toy suppliers.

The New York Times quotes Dave Brandon, the company’s chairman and chief executive, as saying, “Today marks the dawn of a new era at Toys ‘R’ Us, where we expect that the financial constraints that have held us back will be addressed in a lasting and effective way.”

The future of the company is all speculation at this point, but as Newsweek writes, Toys “R” Us hopes to “…alleviate its debt and continue to operate…” through financial reconstruction.