NEW YORK (AP) — Toys R Us, a nostalgic favorite even as many shoppers moved to Amazon and huge chains like Walmart, plans to close up to 182 stores, or about 20 percent of its U.S. locations.
The Lima location was not included in the closure list.
The company that once dominated toy sales in the U.S. has been operating under bankruptcy protection since last fall, when it filed for Chapter 11 under the weight of $5 billion in debt. Toys R Us operates about 900 stores in the U.S., including Babies R Us stores.
The store closings will begin in February and the majority of locations identified for closure, which include Babies R Us stores, will go dark by mid-April. At some other locations, Toys R Us and Babies R Us stores will be combined. The bankruptcy court still must sign off on the closings.
Toys R Us wouldn’t say how many jobs will be cut. It said some employees will be moved to other stores and those who cannot be will get severance. Chairman and CEO Dave Brandon said Wednesday that tough decisions are required to save Toys R Us.
He acknowledged “operational missteps” during the critical holiday shopping season when shopping at its stores and online wasn’t as easy as it should have been.
Toys R Us, based in Wayne, New Jersey, has struggled with debt since private-equity firms Bain Capital, KKR & Co. and Vornado Realty Trust took it private in a $6.6 billion leveraged buyout in 2005. The plan had been to take the company public again, but weak sales have prevented that from happening. With such debt levels, Toys R Us has not had the financial flexibility to invest in its business.
Meanwhile, other stores like Target have been increasing their assortment of toys.
Toys R Us reigned supreme in the 1980s and early 1990s, when it was one of the first of the “category killers”— a store totally devoted to one thing: toys. Its scale gave it leverage with toy sellers and it disrupted general merchandise stores and mom-and-pop shops. Children sang along with commercials featuring the mascot, Geoffrey the giraffe.
Now Toys R Us and other category killers like the now-defunct Sports Authority, Borders and Circuit City, are being upended by Amazon and online shopping. More than three dozen retailers sought bankruptcy protection last year, due in large part to radical shifts in where people shop, and what they buy.
Queens residents Carlos Lopes, left, and Katiria Maldonado and their young child leave Babies R Us after shopping at Manhattan's Union Square store in New York, Wednesday, Jan. 24, 2018. The couple said they were "shocked" to hear about the store's closing. Toys R Us, which owns Babies R Us, has been squeezed by Amazon.com and huge chains like Walmart. The company will close 180 stores, or about 20 percent of its U.S. locations, within months. Some Toys R Us locations will be combined with Babies R Us. (AP Photo/Kathy Willens)
Jennifer Merva and her son Sebastian Merva, 4, leave Babies R Us in Summit Township, Pa., on Wednesday, Jan. 24, 2018, after shopping for gifts for a baby shower. As part of a Chapter 11 bankruptcy reorganization, parent company Toys R Us announced on Jan. 24 that the Summit Township store would be one of 182 stores to close over the next few months. (Christopher Millette/Erie Times-News via AP)
Joaquin Pinela shows a flyer he received when checking out after shopping at a Babies R Us store in New York's Union Square, Wednesday, Jan. 24, 2018. Toys R Us, which owns Babies R Us, has been squeezed by Amazon.com and chains like Walmart. The company will close 180 stores, or about 20 percent of its U.S. locations, within months. At some other locations, the retailer is combining its Toys R Us and Babies R Us stores. (AP Photo/Kathy Willens)