(CMR) Reports are coming in from several sources that the American based Toys R Us chain of stores could be shutting down it's operations by next week.
Bankrupt Toys ‘R' Us is preparing to liquidate its American stores and operations after failing in its efforts to find a buyer or a way to restructure its debt deal.
The toy retailer filed for Chapter 11 bankruptcy protection in September, aiming to cut debt, restructure its operations and reemerge as a healthier company. But that blueprint seems to have failed. Toys R Us is now set to convert its Chapter 11 case into a Chapter 7 case, paving the way for the company to sell off all of its assets and close its remaining stores — barring a last-second miracle to keep the company alive.
Although its still being described as a fluid situation, shuttering the US division of the famed toy seller is said to be increasingly likely, because hopes are fading that the company will be able to find a buyer or that money lenders will agree to debt restructuring terms, sources told Bloomberg.
In January, Toys ‘R' Us revealed that it intended to close 184 locations. The decision about how many additional stores it will liquidate could come on Monday, following a bankruptcy hearing in Richmond, Virginia, sources told the Wall Street Journal.
The softness in the toy industry is partly due to the rise of video games and other high-tech toys that kids are increasingly playing with instead of action figures, dolls and board games.
But the shifting tide in retail isn't helping either.
The dominance of Amazon (AMZN) has put pressure on many consumer products companies as Amazon has made a relentless push to lower prices.