The Toys R Us opportunity

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The Toys R Us opportunity

By Gina Acosta - 03/15/2018
The liquidation news comes six months after Toys R Us filed for bankruptcy.

Toys"R"Us planning to close or sell all of its more than 800 stores across the U.S. creates a new opportunity for food retailers to pick up a larger share of the toy business.

Toys"R"Us announced Thursday that it has filed a motion seeking Bankruptcy Court approval to begin the process of conducting an orderly wind-down of its U.S. business and liquidation of inventory in all 735 of the company's U.S. stores, including stores in Puerto Rico. 

The news presents an opportunity for grocery stores and other retailers to expand their toy assortments in order to benefit from shoppers who would appreciate being able to buy their groceries and toys at the same time.

Toys"R"Us also announced that it is pursuing a going concern reorganization and a sale process for its Canadian and international operations in Asia and Central Europe, including Germany, Austria and Switzerland. 

The company's international operations in Australia, France, Poland, Portugal and Spain are considering their options in light of this announcement, including potential sale processes in their respective markets. The company's stores in all these international markets are currently open and serving customers. 

"I am very disappointed with the result, but we no longer have the financial support to continue the company's U.S. operations," said CEO Dave Brandon. "We are therefore implementing an orderly process to shutter our U.S. operations and will pursue going concern sales or reorganizations of certain of our international businesses, while our other international businesses consider their options."

The company says it and its advisers are working to minimize the impact of the U.S. liquidation on the Canadian and other international markets. As part of these efforts, the company is implementing a transition services arrangement for the next 60 days and is developing plans for a potential shared service function to support the international operations going forward.

The liquidation news comes six months after the retailer filed for bankruptcy. The company has struggled to pay down nearly $8 billion in debt — much of it dating to a 2005 leveraged buyout. 

In January, the retailer announced it would close 182 U.S. stores, or about one-fifth of its remaining Toys R Us and Babies R Us locations.