Everyone knows the jingle that starts, “I don’t want to grow up, I’m a Toys R Us kid…” to be that of big box toy and gaming retailer, Toys R Us. From birthdays to Christmas presents, Toys R Us has always been a staple of the community for parents worldwide.
Well, recently, the retailer announced that it has been struggling with of $5 billion in debt and intense online competition; therefore, they have filed for bankruptcy protection ahead of the holiday shopping season, assuring customers that stores will remain open.
“[Filing for bankruptcy protection] will provide us with greater financial flexibility to invest in our business … and strengthen our competitive position in an increasingly challenging and rapidly changing retail marketplace worldwide,” Dave Brandon, Chairman and CEO of Toys R Us, said in the announcement.
“For many children, electronics have become a replacement or a substitute for traditional toys,” Neil Saunders, managing director of GlobalData said in an interview with The Chicago Tribune. “Toys R Us had little choice but to restructure and try to put itself on a firmer footing. However, even if the debt issues are solved, Toys R Us still faces massive structural challenges against which it must battle.”
The major battle for most of the traditional brick and mortar retailers-online shopping. People are spending less time in stores and more time on the internet.
Toys R Us is not the only retail giant that has recently filed for bankruptcy. Since the beginning of 2017, 18 additional companies have filed, including Payless Shoe Source, Gymboree Corp. and True Religion jeans.