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Toys R Us Considers Liquidating U.S. Operations To Pay Off Debt

After several failed attempts to emerge from bankruptcy, Toys R Us is considering liquidating its U.S. operations.


In the last few months, the retailer has announced plans to shutter nearly 400 stores across the country in an effort to restructure its debt and pay off creditors. Lenders of $3.1B in loans are likely applying pressure on the toy company, CNBC reports, demanding the brand liquidate in order to pay back money owed.

Toys R Us secured the loan in September in an attempt to restructure its $4.9B debt load prior to the holidays. The company had high hopes that holiday sales would help turn around its ailing operations, but an unexpectedly poor performance forced it to turn to hundreds of store closures — and now the potential liquidation of its U.S. operations — to pay off the debt.

The stock price for both Hasbro and Mattel, two of the main suppliers for Toys R Us, fell after news of the potential liquidation broke Thursday. Hasbro shares fell 3% while Mattel's declined by almost 5%, CNBC reports.