Toys R Us Will Sell Or Close NJ Stores, Company Confirms

WAYNE, NJ — Toys R Us confirmed reports Thursday that it will be "winding down" operations and sell or close 735 U.S. stores. That "winding down" includes liquidating its inventory and holding going-out-of-business sales.

The confirmation comes six months after the New Jersey-based company filed for Chapter 11 bankruptcy protection in federal court.

The timelines for holding such sales has not been determined, Nicole Hayes, a Toys R Us spokesperson, said Thursday morning.

The company would not comment on merchandise returns, gift cards or if coupons would be accepted at any Toys R Us stores or online.

In a news release, the company did say it is engaged in transaction discussions that could ultimately combine up to 200 of the top performing U.S. stores with its Canadian operations.

The liquidation announcement comes about six weeks after Toys R Us confirmed that it would close about 180 of its U.S. stores, including 11 in New Jersey. Closing sales of 10 to 30 percent off have already been going on at those stores.

"I am very disappointed with the result, but we no longer have the financial support to continue the company's U.S. operations," said Dave Brandon, chairman and Chief Executive. "This is a profoundly sad day for us as well as the millions of kids and families who we have served for the past 70 years."

The company will sell or reorganize certain international business, while other international businesses consider their options, Brandon said.

The company's operations in Asia and Central Europe, including Australia, France, Portugal and Spain are "considering their options," including the potential sale of those locations. Stores in those markets remain open.

The company announced Wednesday that its 100 United Kingdom stores would also close, but no exact timeline was provided.

According to CNBC, if Toys R Us shut down completely, it would be "a blow to the toy industry," accounted for 15 to 20 percent of U.S. toy sales last year.

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
Related: Toys R Us To Close All UK Stores

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