Toys R Us will sell or close all of its 735 remaining stores in the United States, the company announced today. The move could put up to 33,000 Americans out of work.
“I am very disappointed with the result, but we no longer have the financial support to continue the Company’s U.S. operations,” said CEO David Brandon in a news release. “We are therefore implementing an orderly process to shutter our U.S. operations and will pursue going concern sales or reorganizations of certain of our international businesses, while our other international businesses consider their options.”
The Wall Street Journal reported on March 14 that Brandon first delivered the news to employees on a conference call.
“I have always believed that this brand and this business should exist in the U.S.,” Brandon said. Suppliers who abandoned the chain over the holidays, as well as customers who chose to shop elsewhere, he added, “will all live to regret what’s happening here.”
News of Toys R Us’ financial troubles arose in September, when the company filed for bankruptcy protection. In January came the announcement of more than 180 planned store closures across the nation. Later, in February, that number was increased to more than 380. While promises of severance benefits for retail workers were broken, a judge allowed the payout of millions in bonuses to the company’s top executives.
Toys R Us has filed for liquidation, with a bankruptcy court hearing scheduled for Thursday afternoon. The status of the company’s international retail footprint is unknown at this time.
Update (March 15): Toys R Us announced its liquidation plans in a news release; we’ve edited the article to reflect this.
The liquidation process could take a while to play out, but there are some important things to note right now. Toys R Us stores will only honor gift cards for the next 30 days, according to a statement given to a reporter for ABC 7 News in Washington, D.C. The company also said in the statement that once liquidation sales begin, stores “will not accept returns.”
- “Gift cards along with Rewards dollars and Endless Earnings are being honored for the next 30 days. We will not accept returns once the liquidation sales begin.”— Horace Holmes (@ABC7Horace) March 15, 2018
- toys r us
We’ve reached out to Toys R Us to confirm.
A similar situation occurred in 2016 when The Sports Authority closed down. In that debacle, some $92 million worth of gift cards were outstanding. Customers had an extremely limited window of opportunity to use them before they became invalid.