Toys 'R' Us mulls bankruptcy filing: Wall Street Journal

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Toys 'R' Us mulls bankruptcy filing: Wall Street Journal

(Reuters) – Toys ‘R’ Us Inc could file for bankruptcy in the coming weeks as pressure from skittish suppliers intensifies, the Wall Street Journal reported on Friday, citing people familiar with the matter. The company and its restructuring advisers are contemplating filing for Chapter 11 protection in the U.S. Bankruptcy Court in Richmond, Virginia, according to the WSJ report. (on.wsj.com/2h87WOt) The privately-held toy retailer had previously said it had been working to help address its roughly $5 billion in debt, of which roughly $400 million comes due. The potential Chapter 11 filing may be a consequence of the company’s suppliers tightening unless the toy retailer is able to make money payments on delivery including holding back on imports, trade terms, the paper reported. Toys ‘R’ Us declined to comment on the report. The move by Toys “R” Us to possibly file for bankruptcy comes at a time when a growing number of consumers increasingly make purchases from online retailers such as Amazon.com Inc (AMZN.O) and avoid visiting brick-and-mortar shops. There have been over a dozen significant retail bankruptcies this year, but none for retailers as big as Toys “R” Us, which has over 1,600 stores worldwide. This month Toys tapped on restructuring attorneys CNBC reported. The business has been saddled with debt because buyout firms KKR & Co L.P. (KKR.N) and Bain Capital LP, together with real estate investment trust Vornado Realty Trust (VNO.N), took Toys “R” Us personal for $6.6 billion in 2005. Reporting by Uday Sampath in Bengaluru; editing by Diane CraftOur Standards:The Thomson Reuters Trust Principles.

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