US: Toys ‘R’ Us files for bankruptcy

By Barry Ellsworth

TRENTON, Ont. (AA) - Toys ‘R’ Us retailer filed for bankruptcy in the United States and plans to do the same in Canada, according to media reports Tuesday.

But the company said it has secured $3 billion in financing so the “vast majority” of its 1,600 worldwide stores will continue business as usual. The toy giant, which employs about 65,000 workers globally, submitted its filing late Monday.

Toys ‘R’ Us said stores outside Canada and the U.S. -- it has 255 outlets in Asia and others in Europe, Britain and Australia -- are not part of the bankruptcy filings.

The bankruptcy comes as the company, operating stores under the names Toys ‘R’ Us and Babies ‘R’ Us, struggles with $5 billion in debt. But in a statement sent to various media outlets, chairman and CEO Dave Brandon was optimistic about the future of the chain.

“Today marks the dawn of a new area 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,” he said. “Together with our investors, our objective is to work with our debt holders and other creditors to restructure the $5 billion of long-term debut on our balance sheet.”

The company said its approximately 1,600 Toys ‘R’ Us and Babies ‘R’ Us stores around the world – “the vast majority of which are profitable” – are continuing to operate as usual, as will its online order operation.

Toys ‘R’ Us began operations in 1948, while Babies ‘R’ Us was formed in 1994. The company is headquartered in Wayne, New Jersey.