Toys “R” Us files for bankruptcy protection
Big box toy retailer struggling with $5B US in long-term debt, says stores will continue to operate
Toys “R” Us, the big box toy retailer struggling with $5 billion in long-term debt, has filed for Chapter 11 bankruptcy protection in the U.S. ahead of the key holiday shopping season, saying it will continue its normal business operations.
The company based in Wayne, New Jersey, announced late Monday that it was voluntarily seeking relief through the U.S. Bankruptcy Court for the Eastern District of Virginia in Richmond — and that its Canadian subsidiary would be seeking similar protection through a Canadian court in Ontario as it seeks to reorganize. To know more about family law attorney visit us here Tiffany Fina Law Firm service.Even though a specific reason for divorce is not mandatory, there are some specific requirements that must be met before a judge can grant a divorce. Tiffany Fina Law give us brief idea about that.
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Toys “R” Us said court-supervised proceedings will help restructure the outstanding debt and set the stage for long-term growth. The company announcement also said separate operations outside the U.S. and Canada are not part of the filings. And it emphasized that its stores worldwide will remain open and that it will continue to work with suppliers and sell merchandise.
“The company’s approximately 1,600 Toys R Us and Babies R Us stores around the world — the vast majority of which are profitable — are continuing to operate as usual,” the company statement added. “Customers can also continue to shop for the toy and baby products they are looking for online.”
Dave Brandon, company chairman and CEO, said that the court filing provides a path for the company and its investors to work with its debtholders and other creditors to work on restructuring the debt beleaguering the pioneering toy retailer. As like these big companies, we know debt management is a pain no doubt but you can always involve experts in getting help with your debt problem. They know all in-outs os this.
“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 … and strengthen our competitive position in an increasingly challenging and rapidly changing retail marketplace worldwide,” he said in the announcement.
The move comes at a critical time ahead of the peak holiday shopping season that is crucial to retailers’ bottom lines. Brandon expressed confidence in the looming reorganization, vowing that the iconic Toys “R” Us and Babies “R” Us brands known to shoppers for generations would continue on.
In a separate statement, the company also said its online sales sites worldwide remain open for business during the court-supervised process. It added that the company’s operations outside of the U.S. and Canada, including operations in Europe and Australia as well as some 255 licensed stores and joint venture partnership in Asia — all separate entities — were not part of the Chapter 11 filing or the parallel Canadian move.
The company has nearly 65,000 employees worldwide and bills itself as a leading global retailer of toy and baby products. Merchandise is sold through 885 Toys “R” Us and Babies “R” Us stories in the U.S., Puerto Rico and Guam, and in more than 810 international stores and over 255 licensed stores in 38 countries and jurisdictions.
Toys ‘R’ Us will file for bankruptcy protection in Canada
The retailer will file under the Companies’ Creditors Arrangement Act in Ontario court now that Chapter 11 documents have been filed in the U.S.
Toys “R” Us has filed for bankruptcy protection in the United States and says it intends to follow suit in Canada.
The company filed Chapter 11 documents late Monday in U.S. Bankruptcy Court in Richmond, Virginia and says its Canadian subsidiary plans to seek protection in parallel proceedings under the Companies’ Creditors Arrangement Act in the Ontario Superior Court of Justice.
The chain also said it had secured $3 billion U.S. in financing to stay open while it restructures its outstanding debt and establishes a sustainable capital structure to invest in long-term growth.
Toys “R” Us says the “vast majority” of its approximately 1,600 Toys “R” Us and Babies “R” Us stores around the world and its web portals continue to operate as usual.
The company adds that it is committed to working with its vendors to ensure inventory levels are maintained and products continue to be delivered.
The company says operations outside of Canada and the U.S., including some 255 stores in Asia, are separate entities and are not part of the Chapter 11 filing and CCAA proceedings.
“Today marks the dawn of a new era at Toys “R” Us where we expect that the financial constraints that have held us back will be addressed in a lasting and effective way,” said chairman and CEO Dave Brandonin a statement.
“Together with our investors, our objective is to work with our debtholders and other creditors to restructure the $5 billion U.S. of long-term debt on our balance sheet.”
Toys “R” Us is headquartered in Wayne, N.J., and has nearly 65,000 employees worldwide.
Toys ‘R’ Us Statement.
TOYS“R”US, INC. COMMENCES COURT-SUPERVISED PROCESSES TO IMPLEMENT FINANCIAL RESTRUCTURING
- Files Voluntary Chapter 11 Petitions in U.S. and Intends to Seek Protection under CCAA in Canada
- Operations Outside U.S. and Canada Not Included in Proceedings
- Toys“R”Us and Babies“R”Us Stores and Web Stores across the World are Open and
Continuing to Provide World-Class Experiences for Customers
- Restructuring Process Expected to Enhance Financial Flexibility for Investments in Growth Initiatives
- Company Receives Commitment of Over $3.0 Billion in Debtor-in-Possession Financing to Support Operations
Toys“R”Us, Inc. (“the Company”) today announced that the Company and certain of its U.S. subsidiaries and its Canadian subsidiary have voluntarily filed for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of Virginia in Richmond, VA. In addition, the Company’s Canadian subsidiary today intends to seek protection in parallel proceedings under the Companies’ Creditors Arrangement Act (“CCAA”) in the Ontario Superior Court of Justice. The Company intends to use these court-supervised proceedings to restructure its outstanding debt and establish a sustainable capital structure that will enable it to invest in long-term growth and fuel its aspirations to bring play to kids everywhere and be a best friend to parents.
The Company’s operations outside of the U.S. and Canada, including its approximately 255 licensed stores and joint venture partnership in Asia, which are separate entities, are not part of the Chapter 11 filing and CCAA proceedings.
The Company’s approximately 1,600 Toys“R”Us and Babies“R”Us stores around the world – the vast majority of which are profitable – are continuing to operate as usual, providing customers with great service and a curated assortment of merchandise in the toy and baby categories. Customers can also continue to shop for the toy and baby products they are looking for online on the Company’s newly launched www.toysrus.com and www.babiesrus.com web stores. Customers should expect the Company’s loyalty programs, including its Rewards“R”Us, Geoffrey’s Birthday List and Babies“R”Us Registry, to continue as normal.
“Today marks the dawn of a new era at Toys“R”Us where we expect that the financial constraints that have held us back will be addressed in a lasting and effective way,” said Dave Brandon, Chairman and Chief Executive Officer. “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. 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.”
Mr. Brandon continued, “As the holiday season ramps up, our physical and web stores are open for business, and our team members around the world look forward to continuing to put huge smiles on children’s faces. We thank our vendors for their ongoing support through this important season and beyond. We also appreciate the strong support our investors have provided over time and the constructive role they are playing in this process that will allow us to create a brighter future for our company. And as importantly, we thank our team members in advance for their hard work and dedication to serving the millions of customers who will shop with us this holiday.”
The Company has received a commitment for over $3.0 billion in debtor-in-possession (“DIP”) financing from various lenders, including a JPMorgan-led bank syndicate and certain of the Company’s existing lenders, which, subject to Court approval, is expected to immediately improve the Company’s financial health and support its ongoing operations during the court-supervised process. Toys“R”Us is committed to working with its vendors to help ensure that inventory levels are maintained and products continue to be delivered in a timely fashion.
In conjunction with the Chapter 11 process in the U.S., the Company has filed a number of customary motions with the bankruptcy court seeking authorization to support its operations during the restructuring process and ensure a smooth transition into Chapter 11 without disruption, including authority to continue payment of employee wages and benefits, honor customer programs, and pay vendors and suppliers in the ordinary course for all goods provided on or after the filing date.
Additional information can be accessed by visiting the Company’s restructuring website at www.toysrusinc.com/restructuring, calling the Company’s Information Hotline, toll- free in the U.S. and Canada at (844) 794-3476, or sending an email to toysrusinfo@PrimeClerk.com. Court filings and other documents related to the court- supervised process in the U.S. are available on a separate website administered by the Company’s claims agent, Prime Clerk, at https://cases.primeclerk.com/toysrus. Information about the CCAA proceedings will be available on a separate site maintained by an independent monitor. The appointment of the monitor and address of the monitor website are expected to be announced later today.
Kirkland & Ellis LLP is serving as principal legal counsel to Toys“R”Us, Alvarez & Marsal is serving as restructuring advisor and Lazard is serving as financial advisor.
About Toys“R”Us, Inc.
Toys“R”Us, Inc. is the world’s leading dedicated toy and baby products retailer, offering a differentiated shopping experience through its family of brands. Merchandise is sold in 885 Toys“R”Us and Babies“R”Us stores in the United States, Puerto Rico and Guam, and in more than 810 international stores and over 255 licensed stores in 38 countries and jurisdictions. With its strong portfolio of e-commerce sites including Toysrus.com and Babiesrus.com, the company provides shoppers with a broad online selection of distinctive toy and baby products. Toys“R”Us, Inc. is headquartered in Wayne, NJ, and has nearly 65,000 employees worldwide. The company is committed to serving its communities as a caring and reputable neighbor through programs dedicated to keeping kids safe and helping them in times of need. Over the past three decades, the Company has given more than $100 million in product donations to children’s charities. Since 1992, the Toys“R”Us Children’s Fund, a public charity affiliated with Toys“R”Us, Inc., has also donated more than $130 million in grants. For more information, visit Toysrusinc.com or follow @ToysRUsNews on Twitter.
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