Looks like Geoffery the Girrafe will have to look for another home. Major toy retailer Toys R Us has recently filed for bankruptcy over in the United States where the company headquarters is located.
According to a report from Bloomberg, thanks to a crushing debt load from a previous buyout and the rise in online shopping, the once-dominant toy retailer has no choice but to file for Chapter 11.
No plans for any store closures were announced though and so far according to the company, their stores across the globe will continue to operate as normal.
“Like any retailer, decisions about any future store closings – and openings – will continue to be made based on what makes the best sense for the business,” Michael Freitag, a spokesman for Toys “R” Us, said in an email to Bloomberg.
And if you’re wondering just what that legacy debt is, it’s from a 2005 buyout that cost USD$7.5 billion brought about by Bain Capital, KKR & Co. and Vornado Realty Trust. This huge amount loaded the company with debt which it has struggled to work itself out off.
Despite the CEO David Brandon’s efforts since 2015 had seen some success in reducing liabilities, ultimately it wasn’t enough. According to Bloomberg, the company has not shown an annual profit since 2013.
As mentioned before, it’s still business as usual for all the stores both in the US and globally, for now. How this will affect the stores in countries like Malaysia, Singapore and other countries will only be known as time passes, so stay tuned here for updates.