Toys R Us To Close All UK Stores

WAYNE, NJ – Toys R Us, the once-dominant retailer, announced Wednesday it would close all of United Kingdom stores.

The company appointed administrators last month to run its United Kingdom business, but no buyer came forward to purchase the company, CNN Money reported.

Twenty-five of the company's 100 U.K. stores have closed; Toys R Us said in a statement that closing the remaining stores is expected to take about six weeks, "with further announcements to follow," according to the report.

Meghan Sowa, a Toys R Us spokesperson, declined to comment on the report or on any effect, if any, the closures would have on the company's U.S. operations.

The U.K. announcement comes six months after the Wayne-based retailer filed for Chapter 11 bankruptcy protection in federal court. The company announced last month that it was closing about 180 U.S. stores, about 20 percent of its 1,600 stores worldwide, and offered 10 to 30 percent off sales at those stores.

The announcement also follows several reports that suggest the company is facing a troubled future in the U.S.; Bloomberg reported Thursday that Toys R Us is preparing to liquidate its U.S. operations after failing to find a buyer or restructure its debt deal with lenders.

Just days ago, Toys R Us announced this on Twitter: "To our loyal customers: We’ve seen an amazing outpouring of love and support in recent days and we truly appreciate it. Our stores are open for business, ready to bring joy to children wherever we can, and to help new and expecting parents navigate raising a family."

The bankruptcy filing came amid slumping sales and mounting debt, which grew to about $5 billion, although Toys R Us announced at the time that the "vast majority" of its 1,600 worldwide locations were profitable.

The once-dominant retailer struggled to compete with online retail giant Amazon and stores like Walmart, The New York Times reported. Toys R Us had a $400 million debt payment due this year and was "burning through cash," the Times reported, and hired law firm Kirkland & Ellis to devise a strategy moving forward.

A federal bankruptcy judge ruled late last year 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 past holiday season.

Toys R Us received a commitment of more than $3 billion of debt financing from lenders, including JP Morgan Chase and some of its existing lenders, the company announced. This money is expected to "immediately improve" Toys R Us's financial health, the company announced.

Related: Toys R Us Files Chapter 11 Bankruptcy, Outlines Strategy
Related: Everything Must Go: NJ Toys R Us, Babies R Us Closing Sale On Now

With reporting by Kara Seymour and Eric Heyl, Patch Staff

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