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Toys 'R' Us plans to close all U.S. stores; 33,000 jobs at risk - source



(Reuters) - Bankrupt Inc is preparing to sell or close all 885 stores in its U.S. chain, risking up to 33,000 jobs, after failing to reach a deal to restructure billions of dollars in debt, a person familiar with the matter said on Wednesday.

With shoppers flocking to like and children choosing electronic gadgets over toys, has struggled to service debt from a $6.6 billion leveraged buyout by firms and and in 2005.

had been closing one-fifth of its U.S. stores as part of efforts to emerge from one of the largest ever bankruptcies by a

But creditors decided they can get more from liquidating assets of the toy seller, the largest in the and one of the best known in the world, rather than finding a way to keep the business alive, the person said, speaking on condition of anonymity to discuss the private negotiations.

A declined to comment.

The company is expected to make a filing with the bankruptcy court late on Wednesday, the person said.

The planned closure in coming months is a blow to generations of consumers and hundreds of that sold products at the chain, including Barbie maker Inc , board game company and other large vendors such as Lego.

In Britain, the remaining 75 shops will close within six weeks, joint administrators for the retailer said earlier on Wednesday, after they were unable to find a buyer for all or part of the business, resulting in the loss of about 3,000 jobs.

earlier on Wednesday reported that told U.S. staff about the likely closures on a conference call.

Efforts to restructure collapsed this month after lenders decided, absent a clear reorganization plan, they could recover more by closing stores and raising money from merchandise sales, sources with knowledge of the matter said.

"It's a relentlessly for mall-based retailers. There just aren't the same feet coming through the doors," said Brian Davidoff, a

More than 8,000 U.S. closed in 2017, roughly double the average annual store closures in the previous decade, according to data from the

is also likely to liquidate in France, Spain, and Australia, Brandon said, according to It quoted Brandon as adding that the retailer also planned to sell operations in Canada, and

was already working with liquidators Tiger Capital Group LLC, Great American Group LLC, and on previously announced store closures, and the four are expected to continue with the additional closings, sources said.

The future of the retailer's big-box shops, many located in strip centres, was uncertain.

The disappearance of in the and the UK leaves a void for hundreds of that relied on the chain as a top customer alongside and Target Corp .

Shares in Mattel, the world's largest toymaker, and No. 2 U.S. toymaker Hasbro tumbled last week on liquidation reports. Both companies rely on for roughly 10 percent of their revenues, according to their 2016 annual reports.

The liquidation will be more painful for small, independent that relied on the chain as a major showcase, said Lutz Muller, of consultancy

"A large number will go to the wall," Muller said.

(Reporting by in Chicago; Additional reporting by and Sangameswaran S in Bengaluru; Editing by Peter Henderson, and Leslie Adler)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, March 15 2018. 06:26 IST