Toys R Us has filed for bankruptcy protection, securing $3 billion in financing in order to stay open and continue operations while it restructures its outstanding debt.
The company issued a statement this morning confirming that it had filed for financial relief under Chapter 11 of the Bankruptcy Code in the United States and the Companies’ Creditors Arrangement Act in Canada. The bankruptcy protection filing will not affect the company’s operations outside of Canada and the United States, the statement confirmed.
Retail stores will remain open for business during Toys R Us’ bankruptcy protection filing. Dave Brandon, CEO and chairman of Toys R Us, addressed concerns about the company’s financial future in the statement, saying that with the bankruptcy protection in place, the company could absolve the financial restraints it has been wrestling with for some time.
Our objective is to work with our debtholders and other creditors to restructure the $5 billion of long-term debt on our balance sheet, which will provide us with greater financial flexibility to invest in our business, continue to improve the customer experience in our physical stores and online, and strengthen our competitive position in an increasingly challenging and rapidly changing retail marketplace worldwide.
Brandon thanked vendors for their continued support throughout the turbulent period for the company, and assured that there would be stock on shelves throughout the holiday period.
Toys R Us has approximately 1,600 stores around the world, which Brandon confirmed are still mostly profitable.
“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,” Brandon said.