At Least 100 Toys R Us Stores May Close: Report

WAYNE, NJ — Toys R Us may close at least 100 United States stores in the wake of lower holiday sales, according to report by Bloomberg. Sales in the United States are down 15 percent this holiday shopping season compared to last year, according to the report, citing people with knowledge of the situation.

As many as 200 stores could be on the chopping block, according to the report, but no decision has been made on the exact number. A spokesperson for the Wayne-based retailer said no decision has been made yet.

"Decisions about our real estate portfolio will be made only after careful consideration about the best interests of our business, said spokesperson Meghan Sowa. "Any speculation about potential store closures at this time is premature and likely to be inaccurate."

Toys R Us operates 879 retail stores in the United States, according to Bloomberg, citing the company's latest annual report.

The closings are the latest in a series of rough news for the once-dominant giant since it filed for Chapter 11 bankruptcy protection in September.

Toys R Us has struggled to compete with online retail giant Amazon and stores like Walmart, the New York Times reported, and owes about $5 billion in debt. The company has a $400 million debt payment due next year and was "burning through cash," the Times reported, and hired law firm Kirkland & Ellis to devise a strategy moving forward.

Store closings were mentioned as a possibility in other reports almost immediately after the bankruptcy protection was filed. According to a NorthJersey.com report, citing the company's bankruptcy filing, 40 percent of company's toy vendors refused to ship merchandise unless their outstanding bills were paid or they received cash on delivery or cash in advance.

A federal bankruptcy judge ruled earlier this month that Toys R Us may pay 17 executives about $14 million in incentive bonuses if it hits a certain earnings amount. Attorneys representing the company argued that the bonuses would help executives focus on increasing sales during the holiday season.

"Timing, of course, is everything," they wrote in a Nov. 14 filing, The Washington Post reported. "Now more than ever the senior management team must be properly motivated and incentivized to handle the panoply of responsibilities attendant to their two full-time jobs of leading the Debtors through this restructuring and, at the same time, implementing a worldwide strategy to increase sales following a near shut-down of operations just eight short weeks ago. The task at hand cannot be underestimated."

Toys R Us also had a bad spell last month when a glitch allowed customers to "stack" three coupon codes for a total discount of 60 percent off their online order. Toys R Us learned of the glitch and cancelled orders placed using the glitch.

Related: Toys R Us Files Chapter 11 Bankruptcy, Outlines Strategy
Related: Stores Closing Part Of Toys R Us' Long-Term Plan: Report
Related: Bankrupt Toys R Us Can Pay Executives $14M In Bonuses: Report
Related: Toys R Us Cancels Orders After Coupon Glitch

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Patch file photo by Daniel Hubbard