A report is saying that retailer Toys “R” Us will close dozens of stores, leaving thousands of workers out of a job, across the United States.
The Wall Street Journal, citing sources close to the matter, reported that the chain will close another 200 stores as well as the more than 180 locations that were announced to be closed. Some 9,000 people could be laid off.
Toys “R” Us experienced “a disappointing holiday sales season” as part of its rationale to close more locations, the report said.
The New Jersey-based firm also announced that it filed for bankruptcy protection in January before announcing the closure of 182 stores—or around a fifth of the total stores it operates in the United States, according to Reuters.
Toys “R” Us is planning to hire four liquidators to help it shutter the 182 underperforming stores across the country, Reuters reported. Tiger Capital Group LLC, Great American Group LLC, Hilco Merchant Resources LLC, and Gordon Brothers Retail Partners LLC will be hired to do the work.
“The reinvention of our brands requires that we make tough decisions about our priorities and focus,” stated Dave Brandon, chairman and CEO of Toys “R” Us, to its customers. “The actions we are taking are necessary to give us the best chance to emerge from our bankruptcy proceedings as a more viable and competitive company.”
The Journal, however, reported that even more stores could be closed, adding that store managers will be asked to tell workers that “there are no severance benefits being provided for the store-closing process.”
All 83 Toys “R” Us stores in Canada will remain open, according to the president of the Canadian unit, Melanie Teed-Murch, in a letter to customers, Reuters reported.
The firm also said it is planning to remodel some of its locations, combining Toys “R” Us stores with Babies “R” Us stores.
Toys “R” Us is facing growing competition from regional independent toy stores as well as online giant Amazon.com.
The company filed for bankruptcy protection just ahead of the 2017 holiday season in the United States and Canada to restructure $5 billion of long-term debt, casting doubts over the future of its 64,000 employees and nearly 1,600 stores. The bankruptcy is also causing headaches for two of Toys “R” Us’s biggest suppliers, toymakers Mattel and Hasbro. Toys “R” Us was Mattel’s second-largest customer in 2016, representing 11 percent of its total sales.
Last month, D.A. Davidson analyst Linda Bolton Weiser said she expected the store closures to hit Barbie-maker Mattel’s 2018 estimated sales growth by 1.5-2 percent, assuming shipments that would have gone to Toys “R” Us are not picked up by other retailers.
From The Epoch Times