Economy

Toys R Us explores possible bankruptcy to deal with debt

Toys R Us explores possible bankruptcy to deal with debt”

Toys "R" Us Inc has tapped lawyers at Kirkland & Ellis LLP to help restructure its heavy debt load, people familiar with the matter said, the latest sign of trouble for a once-mighty retailer that has struggled to fend off Amazon.com Inc and discount chains.

"As we previously discussed on our first quarter earnings call, Toys R Us is evaluating a range of alternatives to address our 2018 debt maturities, which may include the possibility of obtaining additional financing", Toys "R" Us spokeswoman Amy von Walter said. A spokesman for Kirkland & Ellis declined to comment. That, in his view, can largely be attributed to the company's private equity owners, Kohlberg Kravis Roberts, Bain Capital Partners and Vornado Realty Trust.

Toys R Us has almost 65,000 employees worldwide, with 885 Toys R Us and Babies R Us stores in the United States, Puerto Rico and Guam, and more than 810 global stores in 37 countries.

However, competition has been intense from the big box retailers such as Target and Walmart that have increased the number of toy offerings they have online and in stores.

Numerous traditional retailers continue to struggle against competitors like Amazon, but the debt load that Toys "R" Us is carrying has increased the pressure.

Toys R Us isn't an apparel retailer, but numerous problems facing the company look like those of apparel sellers going bankrupt this year. If Toys R Us files for reorganization, it would mean that creditors may have to take pennies on the dollar, and that isn't going to bode well for the payments that the toy manufacturers expect for their products.

The toy retailer has almost $5 billion worth of long-term debt, while at the same time has burned through large sums of cash as its sales continue to decline.

As of April 29, the company had $301 million in cash or cash equivalents, down from $458 million a year earlier, according to a quarterly securities filing in June.

Already this year, there has been a wave of retail bankruptcies, including children's clothing retailer Gymboree, Payless Shoesource and rue21, which sells teen clothing.



Like this

Latest


08 September 2017
8-year-old dies after being attacked with a hammer
Chaney is accused of attacking his ex-girlfriend and two children - a 7-year-old girl and the 8-year-old boy - with a hammer. Sacramento police say officers responded to the scene after a vehicle connected to the suspect was flagged by a POD device.

08 September 2017
Samsung's new mobile security program is offering cash for bugs
Depending on the severity level of the vulnerability, the rewards amount will range between $200 and $200,000 for qualified security reports.

08 September 2017
President Trump meets with Emir of Kuwait
But, Trump added, he was determined to end "certain countries" complicity in "massive funding of terrorism". Asked if Syrian President Bashar al Assad is using chemical weapons again in that country's civil war, Mr.

07 September 2017
Gap, Banana Republic stores closing
Gap said in a statement posted online Wednesday that it also expects Athleta, a trendy athletic wear brand, to drive growth. Peck referred to Old Navy as "obviously the very important horse pulling the cart right now inside of this company".

07 September 2017
Fentanyl detected in over 80% of BC overdose deaths
Even so, with 876 overdose deaths so far this year, BC is 82 per cent ahead of its year-to-date total at the same time last year. The coroners service says 81 per cent of the illicit drug deaths in BC so far this year have involved fentanyl.

07 September 2017
Black Mirror: Season 4 First Look Photos Revealed
Although its exact release date has yet to be confirmed, Black Mirror Season 4 is expected to hit Netflix in late 2017. Series co-creator Brooker has co-written this episode with William Bridge.

07 September 2017
Australian MP found child abuse images on husband's computer
Her former husband pleaded guilty to one count of knowingly possessing child pornography and was jailed for four months. She said she had been subjected to vile stories, harassment and threats. "I think it's wrong and it needs to stop".

07 September 2017
Panthers to fly players, staff out of Florida
Several other highly regarded young players who will be vying for roster spots were also slated to participate. The rookie tournament, which was to be held on Florida's west coast in Estero, was canceled on Wednesday.

07 September 2017
Dick's Drive-In is opening a restaurant in the South Sound
There were no other Pierce County cities listed on the online poll that determined the future home of a Dick's Drive-In. North side residents won the last round of voting in 2011 and saw the chain expand into Edmonds as a result.

07 September 2017
DeVos says current approach to campus sexual assault "isn't working"
If colleges and universities do not meet that obligation, the Obama administration threatened to pull their federal funding. Jackson, the top civil rights official at the Education Department, dismissed numerous sexual abuse charges as trumped up.



Recommended