Crushing Debt Forces Toys ‘R’ Us to File for Bankruptcy

One of the largest toy store chains across the globe, Toys”R”Us, has officially filed for bankruptcy. On September 18, 2017, Toys”R”Us, Inc. announced via a formal press release that they have voluntarily filed for Chapter 11 petitions in the U.S. and seek protection under CCAA in Canada.

“The Company intends to use these court-supervised proceedings to restructure its outstanding debt and establish a sustainable capital structure that will enable it to invest in long-term growth and fuel its aspirations to bring play to kids everywhere and be a best friend to parents.”

Per the The New York Times, Toys”R”Us was “faced $400 million in debt payment coming due in 2018” and filing would not only help the company alleviate its outstanding dept, but enable them to invest in long-term growth.
So, what exactly does this mean for consumers? According to Toys”R”Us, Inc. Chairman and Chief Executive Officer, Dave Brandon, nothing for the public to worry about, business as usual.

“We are confident that these are the right steps to ensure that the iconic Toys”R”Us and Babies”R”Us brands live on for many generations.” – Dave Brandon, Chairman and CEO

But, is it really business as usual? In the midst of bankruptcy rumors, Bloomberg reported that some suppliers scaled back shipments to the retail giant. Hasbro, however, was not among the vendors who cut their shipments to the struggling toy store chain.
Are you surprised by the news? Will this have an impact in future sales of Hasbro toys sold through Toys”R”Us? Share your thoughts here in our Allspark forums!