Earlier this week, Toys “R” Us made a Chapter 11 bankruptcy filing, according to The New York Times.
“This filing is really a buildup of financial problems over the past 15 years,” said Jim Silver, an analyst in the toy industry and editor of toy reviews. “Finally, the straw broke the camel’s back,” he concluded. The giant company is in over $400 million of debt, so filing for bankruptcy would give them the leg up they need to restructure and save their brand.
The other toy stores out there should be terrified. Toys “R” Us is the largest toy chain in the United States, and makes more than 40% of sales in the fourth quarter of the year, due to the holidays. The active 1,600 Toys “R” Us and Babies “R” Us stores will continue to operate as usual, despite the filing, which will “help with its long term growth plans” and “fuel its aspirations to bring play to kids everywhere and be a best friend to parents.”
We are happy to know the doors won’t be shutting completely, but that a serious revamp and re-handling of finances is in order. We just aren’t ready to say goodbye to our beloved Barbie World just yet.