Toys 'R' Us expects to keep stores open during bankruptcy filingToy retailer has six locations in Central Pa.
Toy giant Toys 'R' Us said it does not expect any of its 1,600 stores around the world, including six in the midstate, will be impacted as a result of its Chapter 11 bankruptcy filing on Monday.
The chain filed the voluntary Chapter 11 petition, which had been rumored in recent weeks, as a way out of its $5 billion in debt. The company is seeking $3 billion in bankruptcy financing, which is subject to court approval, to buy merchandise from its vendors and fund operations.
"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," said CEO Dave Brandon. "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 company has received a commitment for debtor-in-possession financing from J.P. Morgan Chase and other lenders to help sustain its operations during the bankruptcy process.
Toys 'R' Us is the latest big name in the retail industry to file for bankruptcy protection in the face of growing online competition, more discount retailers and overbuilding of stores in many markets.
Given its debt load, there is no guarantee that the toy chain will maintain all of its current stores during the bankruptcy process. Most retail bankruptcy filings lead to sizable store closings.
Toys 'R' Us said the majority of its stores are profitable.