Global retailer, Toys R Us, has filed for bankruptcy protection in the US and Canada in a bid to restructure its outstanding debt and establish a sustainable capital structure.
The retailer’s operations throughout Europe and Australia, including around 255 licensed stores, and a joint venture in Asia are not a part of the bankruptcy filing.
“Today marks the dawn of a new era at Toys R Us, where we expect that the financial constraints that have held us back will be addressed in a lasting and effective way,” said Dave Brandon, chairman and CEO of Toys R Us.
“Together with our investors, our objective is to work with our debtholders and other creditors to restructure the $5 billion of long-term debt on our balance sheet, which will provide us with greater financial flexibility to invest in our business, continue to improve the customer experience in our physical stores and online, and strengthen our competitive position in an increasingly challenging and rapidly changing retail marketplace worldwide.
"We are confident that these are the right steps to ensure that the iconic Toys R Us and Babies R Us brands live on for many generations.”
The firm has since received a commitment for over $3 billion in debtor-in-possession (DIP) financing from various lenders, including a JPMorgan-led bank syndicate.
The commitment is expected to improve the retailer’s financial state and support the business during the court process.
Brandon continued: “As the holiday season ramps up, our physical and web stores are open for business, and our team members around the world look forward to continuing to put huge smiles on children’s faces.
"We thank our vendors for their ongoing support through this important season and beyond. We also appreciate the strong support our investors have provided over time and the constructive role they are playing in this process that will allow us to create a brighter future for our company.
“And as importantly, we thank our team members in advance for their hard work and dedication to serving the millions of customers who will shop with us this holiday.”