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Toys ‘R’ Us could go bankrupt within weeks as it struggles with billions of dollars of debt and mounting pressure from suppliers, The Wall Street Journal reported.



The global toy retailer, which has more than 1,600 outlets is considering filing for Chapter 11 bankruptcy protection in the US before Christmas. Chapter 11 can allow companies to stay operational as they reorganise and pay their creditors.



CNBC reported earlier this month that the ailing firm had hired restructuring advisers from law firm Kirkland & Ellis.





Toys ‘R’ Us has around $5bn (£3.6bn) of debt, $400m of which reportedly comes due next year. The company has been saddled with the vast debt pile ever since buyout firms KKR and Bain Capital took it private for $6.6bn in 2005.



The company previously said it was working with investment bank Lazard to help manage its attempted refinancing.



Toys ‘R’ Us’ suppliers, fearing that the retailer may be in trouble, are now tightening trade terms, including holding back on shipments unless they receive cash payments on delivery, the WSJ reported.



Toys ‘R’ Us did not immediately respond to a request for comment.



In its latest financial results, released in June, Dave Brandon, chairman and chief executive said: “The challenges we faced during [the holiday period in 2016] continued in the marketplace during the first quarter.



“Overall weakness in the baby business, as well as slower growth in the toy category and very aggressive price discounting by our competitors were significant contributors to our disappointing results.”



Many bricks-and-mortar retailers have come under intense pressure from online competitors like Amazon.



Sorry but you cant blame Amazon or online sales for being 5 billion in debt.

i8acobra

Old news. Already declared today.

JonGTR

I'm actually pretty saddened by this. Where else are you going to get that feeling of happiness you had as a kid walking into a large toy store? Walmart, and Amazon don't even compare. I can't think of any other toy stores that have their inventory. Not just the amount of toys, but also the higher end quality. Walmart only carries the bargain junk.

Visionz

It was a really sad day when FAO Schwarz closed it's doors in NYC. I dont know how many of you have ever had the chance to go there, but it was amazing. It made T-R-U look like crap. All of the stuff we all loved as kids...Sat morning cartoons, prizes in cereal boxes, awesome toy stores...they all either have died or will die. The next generation is missing out on so much awesome stuff.

i8acobra

Most people today only care about price. Nobody is willing to pay 10% more for good customer service. Even stores like Home Depot and Lowes (my toy stores) mostly employ unskilled sales people. You used to be able to go in, ask technical question about building materials and get good answers. Now I mostly get "I don't really know", or "Let me look it up".

Stocker

Toys R Us hasn't been a magical place for years. The on near me got rid of their playground and half the lights, now it's all dingy and all the toys are packaged up anyway. 2/10 not very magical

i8acobra

I really miss the local toy stores. There was one in the center of my town that had a giant area filled with thousands of Legos. Anyone could go in and start building stuff whenever they wanted. I used to buy all of my Transformers there.