Toys”R”Us, Inc. announced yesterday that it and several of its subsidiaries in the United States have voluntarily filed for assistance under Chapter 11 of the Bankruptcy Code. In addition, its Canadian Subsidiary intends to seek similar protection under the Companies’ Creditors Agreement Act (CCAA).
According to a statement issued by Dave Brandon, Chairman and Chief Executive Officer of Toys”R”Us, Inc., the company and its investors intend to work “with our debtholders and other creditors to restructure the $5 billion of long-term debt” that remains in their books.
Brandon continues to state that this action “will provide us with greater financial flexibility to invest in our business, continue to improve the customer experience in our physical stores and online, and strengthen our competitive position in an increasingly challenging and rapidly changing retail marketplace worldwide. We are confident that these are the right steps to ensure that the iconic Toys“R”Us and Babies“R”Us brands live on for many generations.”
During these proceedings, the physical Toys”R”Us and Babies”R”Us stores will remain open and operational. Purchases will also continue through their online stores at www.toysrus.com and www.babiesrus.com. Toys”R”Us, Inc. intends to honour their company loyalty programs, including its Rewards”R”Us, Geoffrey’s Birthday List, and Babies”R”Us Registry throughout the proceedings. Toys”
According to Bandon:
“As the holiday season ramps up, our physical and web stores are open for business, and our team members around the world look forward to continuing to put huge smiles on children’s faces. We thank our vendors for their ongoing support through this important season and beyond. We also appreciate the strong support our investors have provided over time and the constructive role they are playing in this process that will allow us to create a brighter future for our company. And as importantly, we thank our team members in advance for their hard work and dedication to serving the millions of customers who will shop with us this holiday.”
To facilitate continued operations, Toys“R”Us, Inc. has filed motions with the bankruptcy court that would allow the company, under court supervision, to continue paying vendors and suppliers, employee wages and benefits, and honouring customer programs as usual.
As well, various lenders, including a JPMorgan-led bank syndicate, have pledged a commitment of more than US$3 billion in debtor-in-possession financing to Toys“R”Us, Inc.
Customers requiring additional information may visit the Toys“R”Us, Inc. restructuring website or call the company’s toll-free information hotline at 844-794-3476.
