Report: Toys “R” Us may liquidate its bankrupt U.S. stores

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Photo via MGN

Toys “R” Us may be planning a sad end to its toy story: the liquidation of its bankrupt U.S. operations. The retailer has yet to find a buyer or secure a debt restructuring deal with its lenders, according to Bloomberg News. That means a shutdown of the company’s U.S. division could happen within days, Bloomberg reported, citing sources close to the situation.

The chain filed for bankruptcy in September with the goal of finding protection from creditors before the holiday shopping season. That provided some reassurances to vendors that it would be able to pay for merchandise, which is essential in the weeks leading up to the holidays.

But the holidays apparently didn’t to play out as Toys “R” Us had hoped. The company announced in January that it would shutter about 180 underperforming locations around the country.

Toys “R” Us has faced an onslaught of competition from online retailers such as Amazon (AMZN) and big-box rivals such as Walmart (WMT). Some of its struggles are tied to its massive debt load from its $6.6 billion leveraged buyout by private equity firms Bain Capital and KKR & Co. more than a decade ago.

Drowning in debt, Toys “R” Us failed to invest in e-commerce and new initiatives that would have helped it remain competitive against Amazon and other rivals.

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