Toys R Us The Latest To File For Chapter 11
On line shopping is apparently doing damage to another brick and mortar chain. Toys R Us, facing hundred's of millions in debt, has filed for Chapter 11 bankruptcy protection.
Even though the holiday shopping season is not that far away and it also attacks one of the nation's most iconic retailers, a household name for more than a generation. Toys R Us pioneered big-box toy retailing generations ago, a national chain that displaced many smaller, neighborhood toy stores.
Long term there is a more than $5 billion debt bill but $400 million short term that need to be dealt with by the end of the year. The filing helps with that.
At this point they are not intending to close stores other than poorly performing locations. Toys R Us has carried a heavy debt load since it became a private company in 2005. Its private equity investors, KKR, Bain Capital, and Vornado Realty Trust, initially planned to earn back their investment with a public stock offering, but that plan fell apart three years later when the Great Recession hit. A JP Morgan lead group is helping with $3 billion in financing.
Consumers should consider Toys R Us business as usual.