FRAMINGHAM – Toys ‘R’ Us, the largest U.S. toy store chain, has filed for bankruptcy protection.
There is a Toys ‘R’ Us location in Framingham at Shoppers World
Toys ‘R’ Us, created in 1948, filed Chapter 11 in the United States.
The company operates 1,600 stores and has more than 60,000-plus employees.
The company said the bankruptcy filing will help it restructure its debt, which is estimated at more than $6.6 billion.
Toys ‘R’ Us received a commitment for more than $3 billion in debtor-in-possession financing from lenders including a JPMorgan-led bank syndicate and certain existing lenders, reported the New Jersey-based company, which also operates the Babies ‘R’ Us chain.
The financing, which is subject to court approval, would pay toy suppliers in anticipation of the big holiday season.
Toys ‘R’ Us said the majority of its stores around the world remained profitable, and would continue to operate as normal through the holiday period, which is the retailers biggest season. The filing affects the U.S, based stores and not locations in Europe or Australia.
“We expect that the financial constraints that have held us back will be addressed in a lasting and effective way,” Chief Executive Dave Brandon said. “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.”
In 2005, led by KKR & Co LP and Bain Capital LP, and real estate investment trust Vornado Realty Trust, Toys ‘R’ Us received a buyout of $6.6 billion. In 2018, the company faces bonds due, some that have lost half their value this year.
Charles Lazarus opened Children’s Bargain Town, a baby-furniture store, in Washington in 1948, according to the Toys “R” Us website.
He added toys two years later and opened the first Toys “R” Us, modelled after self-service supermarkets, in 1957.
Lazarus stepped down as chairman and chief executive in 1994. Two years later, the first babies “R” Us opened.