Richmond, VA -- Toys "R" Us, Inc. filed for protection under chapter 11 of the Bankruptcy Code in Richmond, Virginia Tuesday, as the toy retailer struggled to reorganize its debt.
The 69-year old company has amassed a $5 billion debt that came from slashing prices, signing major, exclusive licensing deals with toymakers and buying up other toy giants FAO Schwartz and KB Toys over the past decade.
At one point, Toys 'R' Us showed signs of a turnaround. After being taken private in 2005, Toys 'R' Us filed for an initial public stock offering in 2010. It ultimately withdrew its filing, citing "unfavorable market conditions."
Late Monday, Toys 'R' Us announced that it had raised $3 billion in bankruptcy financing, which it plans to use to restructure the company, alleviate its debt burden and revamp its stores.
The bankruptcy filing comes just ahead of the holiday season, the busiest time for the year for Toys 'R' Us. The company said it plans on keeping its 1,600 Toys 'R' Us and Babies 'R' Us stores open across the world, though the Wall Street Journal reported that the company will eventually close some of its underperforming locations as part of the bankruptcy process.
Toys 'R' Us noted in a press release that "the vast majority" of its stores are profitable. But the trend line is pointing in the wrong direction. The company reported that same-store sales fell by more than 4% last quarter, losing $164 million.
Bankruptcy petitions were also filed by affiliates of Toys R Us including:
17-34665 Toys "R" Us, Inc.
17-34660 Geoffrey Holdings, LLC
17-34666 Geoffrey International, LLC
17-34667 Geoffrey, LLC
17-34661 Giraffe Holdings, LLC
17-34662 Giraffe Junior Holdings, LLC
17-34663 MAP 2005 Real Estate, LLC
17-34664 Toys "R" Us - Value, Inc.
17-34668 Toys R Us (Canada) Ltd./Toys R Us (Canada) Ltee
17-34669 Toys "R" Us - Delaware Inc.
17-34672 Toys Acquisition, LLC
17-34671 Toys "R" Us Property Company II, LLC
17-34674 TRU Guam, LLC
17-34676 TRU of Puerto Rico, Inc.
17-34677 TRU Taj (Europe) Holdings, LLC
17-34678 TRU Taj Finance, Inc.
17-34679 TRU Taj Holdings 1, LLC
17-34680 TRU Taj Holdings 2 Limited
17-34681 TRU Taj Holdings 3, LLC
17-34682 TRU Taj LLC
17-34659 TRU-SVC, Inc.
17-34683 Wayne Real Estate Parent Company, LLC
17-34673 TRU Asia, LLC
17-34675 TRU Mobility, LLC
17-34670 Toys "R" Us Europe, LLC
Toys R Us seeks these cases to be jointly administered under its chapter 11 case numbered 17-34665-KLP. The bankruptcy case is to be presided over by Judge Keith Phillips. Proposed counsel for Toys R Us is the law firm of Kirkland & Ellis LLP.
The hearings on the Toys R Us first day motions are scheduled for September 19, 2017 at 11:00 a.m. in the courtroom of Judge Phillips located in the U.S. Bankruptcy Court, U. S. Courthouse, 701 E. Broad St., Room 5100, Richmond, VA 23219.