Toys "R" Us Officially Files For Bankruptcy, But It Won't Be Affecting Outlets In Malaysia
The company filed for bankruptcy protection on Monday, 18 September.
By John Lim — 19 Sep 2017, 03:46 PM
Toy store chain Toys "R" Us has filed for bankruptcy protection in the US and Canada, following weeks of speculation as it faces intense competition from online retailers
Bloomberg reported that the company listed debt and assets amounting to more than USD1 billion in the bankruptcy documents on Monday, 18 September.
Prior to the filing, Toys "R" Us managed to secure a funding, which is subjected to court approval, of over USD3 billlion from several lenders.
The filing is among the largest ever by a speciality retailer in the US and casts doubt over the future of its about 1,600 stores and 64,000 employees in North America
"Today marks the dawn of a new era at Toys "R" Us where we expect that the financial constraints that have held us back will be addressed in a lasting and effective way," said Dave Brandon, the company's chairman and CEO, said as quoted by Channel News Asia.
However, operations outside of the United States and Canda, including the 226 stores in Greater China and Southeast Asia, will not be affected by the restructuring
The company's Asia counterpart confirmed via a press release that it is not part of the company's financial restructuring.
"Toys "R" Us (Asia) is open for business and continuing to serve our customers as we always do. We are a financially robust and self-funding retail operation, which continues to significantly grow and invest in this region," said Andre Javes, President of Toys "R" Us (Asia).
Toys "R" Us (Asia) is a joint venture owned approximately 85% by Toys "R" Us Inc and 15% by Fung Retailing (a privately-held entity and member of the Fung Group). It operates as a separate legal entity and is financially independent from all other Toys "R" Us operating companies around the world.
Moving forward, BBC noted that the company will look to online sales to improve its business
"Our objective is to work with our debt holders and other creditors to restructure the long-term debt on our balance sheet, which will provide us with greater financial flexibility to invest in our business," said Brandon.