Published: Thu, September 21, 2017
Finance | By Kristine Clayton

Business as usual for Toys "R" Us Philippines despite US bankruptcy filing

Business as usual for Toys

ASK young American parents about Toys "R" Us and they are likely to be able to sing a jingle from their childhood: "I don't wanna grow up, "cause maybe if I did, I couldn't be a Toys 'R" Us kid".

When it comes to selection, Amazon had more than five million items listed online in its Toys & Games category, according to the report, while other retailers like Toys "R" Us had less than 100,000 each.

Photo Toys "R" Us said it would continue to operate its stores "as usual" during bankruptcy proceedings.

"Increasing reliance on holiday sales, with profitability tied to successful inventory management, shifting of shopping patterns closer to holiday season and pricing pressures of more diversified discount retailers have made it particularly challenging for traditional specialised retail outlets to do well over time", said the UBS note. Toys R Us owes Mattel $159 million, Hasbro $59 million, and Lego $32 million.

Its Canadian unit intends to seek protection in parallel proceedings under the Companies" Creditors Arrangement Act in the Ontario Superior Court of Justice, Toys "R' Us said in a statement. The chapter 11 protections will help out the company during the upcoming holiday season.

In its fight to stay relevant, Toys "R" Us amassed $5 billion in debt.

The retailer said that it has already received a commitment from some lenders, including a JPMorgan-led syndicate, for over $3 billion in debtor-in-possession financing. "We continue to offer awesome new seasonal products and great customer service, just as we always have".

The firms UK, European and Australian operations aren't expected to be part of the bankruptcy proceedings at this time given that they remain profitable, however as we saw in the case of the closure of American Apparel's UK operations a year ago, after its parent company filed for Chapter 11, in 2015, that doesn't mean it may not happen at a later stage.

The company wants to assure all its customers and stakeholders that through this process its 82 stores across every province and e-commerce sites toysrus.ca and babiesrus.ca are open for business. While some kids went to arcades, I went to Toys R Us where kids would have random tournaments in Mario Kart 64 or GoldenEye.

Dave Brandon, chairman and chief executive of Toys'R'Us, said: "We are confident that we are taking the right steps to ensure that the iconic Toys'R'Us and Babies'R'Us brands live on for many generations".

If the bankruptcy restructuring can help Toys "R" Us get a handle on its debt, it's not insane to see a profit in sight. In March 2017 Toys" R " Us Japan was successfully integrated into Toys" R " Us (Asia) which added a further 161 stores to the pan-Asia toy store chain. Sales of fidget spinners, a toy that has become ubiquitous in the past year, got twirling online first.

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