Retail giant Toys’R’Us has filed for bankruptcy protection in the US and Canada after struggling amid mammoth debts and online competition.
But the group, which has around 1,600 stores worldwide and 64,000 employees, said its stores outside of the US and Canada – including the UK and Europe, as well as around 255 licensed stores and a joint venture in Asia – were not included in the so-called Chapter 11 filing.
Toys’R’Us said its stores would operate “as usual” while it looks to restructure a 5.6 billion US dollar (£3.6 billion) debt mountain.
The New Jersey-based chain has secured more than three billion dollars (£2.2 billion) in financing from a syndicate of lenders to help keep its stores open.
It comes ahead of the all-important Christmas season, which makes up around 40% of the group’s annual sales.
The filing is the latest example of turmoil in the retail industry as the shift online takes its toll on established players.
Dave Brandon, chairman and chief executive of Toys’R’Us, said: “We are confident that we are taking the right steps to ensure that the iconic Toys’R’Us and Babies’R’Us brands live on for many generations.”
He added: “As the holiday season approaches, our global team members are ready to serve the millions of kids and families who will be shopping with us.”
The private equity-owned company sought to assure that it will be working to ensure it is fully stocked and that products are delivered on time.
Toys’R’Us has suffered falling like-for-like sales for three quarters in a row and reported a quarterly net loss of 164 million dollars (£121 million) on sales of 2.2 billion dollars (£1.6 billion) in June.
The group’s history dates back to the 1950s, but it arrived in the UK in 1985 with just five stores.
It now has 110 stores across the UK as well as a website, which launched in 1996.