Toys"R"Us Mulls Closing at Least 100 Stores

Toys“R”Us, which filed for bankruptcy in September, is considering closing at least 100 U.S. stores in the face of weak holiday sales, according to people with knowledge of the situation. U.S. sales have declined about 15 percent this holiday shopping season from a year earlier, according to people recently briefed on the matter, who asked not to be identified because the information isn’t public. The number of closed stores could reach approximately 200, one of the people said, but no decision has been made. CEO Dave Brandon said in September that Toys"R"Us was pushing ahead with plans to open more stores in some cities, but that might be changing with weaker-than-expected holiday sales.

Total Retail's Take: It was unlikely that Toys"R"Us was going to emerge from bankruptcy protection without closing any of its 879 U.S. stores, but it is somewhat surprising the large number of stores potentially targeted for closure. The toy retailer had been adamant that closing stores wasn't part of its turnaround plans, but the reality is it's easier to exit leases and shutter locations now while in bankruptcy protection. The holiday season was viewed as a critical time to assess Toys"R"Us’ future, and so far the results have been discouraging. I expect to see store closure announcements from Toys"R"Us in 2018. Right now the question may be how many.