Toys“R“Us to Close 735 US Stores
WAYNE, USA – Yesterday the toy chain store giant Toys“R“Us announced it will close or sell all its 735 stores in the US. The financially struggling company worked on a restructuring plan after asking for chapter 11 insolvency on 19 September 2017.
On 15 March the US company has filed “a motion seeking bankruptcy court approval to begin the process of conducting an orderly wind-down of its US business and liquidation of inventory in all 735 of the company’s US stores, including in Puerto Rico”. Approximately 33,000 people might lose their jobs.
Impact on bicycle industry
The close down of the US toy chain store giant also has a direct impact on the bicycle business. While brand manufacturers are not affected several private label producers and mass merchant suppliers will lose a large customer.
This was already reported right after Toys“R“Us chapter 11 insolvency in September 2017. In its 2017 fourth quarter financial statement Canadian Dorel Industries, parent company of Cycling Sports Group (Cannondale, Fabric, GT, Sugoi etc.) and mass merchant supplier Pacific Cycle, already reported a loss of this large customer leading to lower sales results.
“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,” states Toys“R“Us chairman and CEO Dave Brandon. After six months of discussions under the chapter 11 umbrella he expressed his disappointed with the result: “But we no longer have the financial support to continue the company’s US operations. We are therefore implementing an orderly process to shutter our US operations and will pursue going concern sales or reorganizations of certain of our international businesses, while our international businesses consider their options.”
With an eye on its home market business Toys“R“Us will provide “more details about the plans for the liquidation of its US stores and going out of business sales soon”.
1,472 Toys”R”Us stores worldwide
Regarding its international business the bicycle products selling US toy retail giant stated “it is pursuing a going concern reorganization and a sales process for its international operations in Canada, 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.” There is only one expectation: “The previously announced administration of the UK business continues.”
In an official company statement Toys“R“Us, overlooking a total of 1,472 stores worldwide the company and its advisors are working to minimize the impact of the US liquidation on 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.”
This means that the international Toys“R“Us businesses have to find an investor as soon as possible. Otherwise they might also have to wind down their businesses.