Following days of rumours, it's now official -- Toys 'R' Us has filed for bankruptcy protection.
Late Monday night, the toy retailer announced that they have filed for Chapter 11 bankruptcy protection in the U.S. and that they intend to follow suit in Canada.
Dave Brandon, company CEO said in a statement, "Together with our investors our objective is to work with our debt-holders and other creditors to restructure the $5 billion of long-term debt on our balance sheet, which will provide us with greater financial flexibility to invest in our business ... and strengthen our competitive position in an increasingly challenging and rapidly changing retail marketplace worldwide."
Despite the filing, the company claims that Toys 'R' Us and Babies 'R' Us stores will continue to run as usual. Customers will also be able to continue shopping online for their toys and baby products. The company also stated that it's committed to working with vendors to make sure their inventory levels are maintained.
Toy's 'R' Us employs nearly 65,000 people worldwide and runs approximately 80 stores across Canada and 880 stores in the United States. They also have approximately 780 international stores and more than 245 licensed stores -- none of which are impacted by the filings in the U.S. or Canada. While Toys 'R' Us maintains that it intends to run as usual, there is no official word about whether the company has plans to close unprofitable stores, or lay off any of its employees.