Toys"R"Us Rumored to Be Considering Bankruptcy Filing
Toys"R"Us is rumored to be considering a bankruptcy filing. CNBC reports the toy retailer has hired a law firm to help restructure its roughly $400 million in debt due in 2018, a move that could include the toy store filing for bankruptcy protection. "As we previously discussed on our first quarter earnings call, Toys"R"Us is evaluating a range of alternatives to address our 2018 debt maturities, which may include the possibility of obtaining additional financing," company spokeswoman Amy von Walter said in a statement.
Total Retail's Take: It's a critical time for Toys"R"Us to address its debt burden in 2018, as the holiday season looms. Toys"R"Us has typically thrived during the holiday season, as one would expect (partially due to the popularity of its Big Book catalog). However, as consumer shopping habits change, the toy retailer has seen a decrease in sales, including the critical fourth quarter. Increased online competition, including from Amazon.com, has left the traditional brick-and-mortar retailer in a precarious spot. We'll see if a bankruptcy filing is its next move as it looks to turn around the business.