Toys ‘R’ Us said in a US Bankruptcy Court filing Thursday that it must liquidate, a move that would close 735 stores, leave 33,000 people without jobs and wrap up a 70-year run for a once-beloved holiday shopping spot.
With shoppers flocking to online platforms like Amazon.com Inc and children choosing electronic gadgets over toys, Toys ‘R’ Us has struggled to service debt from a US $6.6 billion leveraged buyout by private equity firms KKR & Co LP and Bain Capital and real estate investor Vornado Realty Trust in 2005.
Toys ‘R’ Us said going-out-of-business sales would begin at all stores immediately. Gift cards can be redeemed for the next 30 days. Employees will be paid for “no fewer than 60 days,” the filing said.
“This is a profoundly sad day for us as well as the millions of kids and families who we have served for the past 70 years,” CEO Dave Brandon said in a statement.
The closure in coming months is a blow to generations of consumers and hundreds of toy makers that sold products at the chain, including Barbie maker Mattel Inc , board game company Hasbro Inc and other large vendors such as Lego.
Toys ‘R’ Us is also likely to liquidate in France, Spain, Poland and Australia, Brandon said, according to The Wall Street Journal. It quoted Brandon as adding that the retailer also planned to sell operations in Canada, Central Europe and Asia.