It’s becoming difficult to keep track of the stores that have gone bankrupt this year and last. Now another hallmark of the big box model of retail is heading into a Chapter 11 bankruptcy. This time it’s toy and game retailer Toys ‘R’ Us. The company will close some stores, but will likely remain in operation throughout the bankruptcy process. Lillian Rizzo and Suzanne Kapner report:
The company expects most of its stores will be open for the holidays and it will use $3 billion in bankruptcy financing to continue buying merchandise and funding its operations, the people said.
The company, which operates about 1,600 stores around the world, was a classic example of a “category killer,” a huge specialty store with low prices that squeezed independent shops. It swallowed up several rivals that have themselves filed for bankruptcy protection, including FAO Schwarz and Kay Bee Toys, a mall-based chain that liquidated hundreds of stores before it was sold.
“They are the last major free-standing toy retailer in the U.S.,” said Jim Silver, the chief executive of TTPM, a website that reviews thousands of toys each year for consumers. As the testing ground for new products, Toys ‘R’ Us often identifies hits before rivals, as it did with Zhu Zhu pets in 2009, Mr. Silver said.
Read more here.
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