Beleaguered toy retailer Toys R Us is preparing to liquidate its bankrupt U.S. operations, it has been claimed.
Bloomberg is reporting that the move comes after the company - which was declared bankrupt last September - failed to find a buyer or come to any deal regarding restructuring its massive amounts of debt. The report comes from sources close to the company, who wish to remain unnamed.
It is understood that while the situation is still ongoing and hope isn't totally lost of a buyer stepping in, a complete shutdown of the U.S. side of the business is highly likely.
Upon entering bankruptcy last September, Toys R Us was planning to introduce a more efficient business model and scale down its existing debt repayments. A fresh $3.1 billion loan was secured to keep the stores running, although 180 of the company's 800 U.S. outlets were shuttered.
Toys R Us was founded in 1948 by Charles Lazarus as Children’s Bargain Town, and has grown to become the largest specialist toy retailer in the United States. The firm's current issues stem from a $7.5 billion leveraged buyout in 2005 by Bain Capital, KKR & Co. and Vornado Realty Trust which saddled the company with crippling amounts of debt.
The ongoing success of its business enabled Toys R Us to keep its head above water and manage this debt, but in recent years it has seen its market share eroded by online retailers like Amazon and superstores like Walmart.
The news comes after it was confirmed that the company's UK operation had gone into administration after failing to find a buyer.
Thanks to Agent721 for the tip!