Toys 'R' Us Plans to Close Around 180 U.S. Stores This Year
Toys 'R' Us Inc. plans to close about 180 stores in the U.S. as the retailer seeks an exit from bankruptcy proceedings.
On Tuesday in a letter to customers posted on the company's website, Chairman and Chief Executive David Brandon said the company expects the majority of the stores will close in the middle of April.
A motion filed in the U.S. Bankruptcy Court for the Eastern District of Virginia--a link to which Toys 'R' Us posted on its website--said the company's management team and advisers determined that up to 182 "underperforming brick-and-mortar store locations" could be closed. The stores collectively constitute approximately 6.9 million square feet of retail space, the motion said.
According to the motion, an "overwhelming majority" of those stores have negative sales trends and have failed to meet performance standards.
The determination on whether to close all 182 stores will depend on the outcome of negotiations with landlords for more-favorable lease terms and rent reductions at certain outlets, the motion said.
On its website, Toys 'R' Us said the list of stores that could be shut, which is included in the motion, is subject to change pending court approval.
In his letter, Mr. Brandon said the company planned to convert a number of locations into co-branded Toys 'R' Us and Babies 'R' Us stores.
The president of the company's Canadian operation, Melanie Teed-Murch, said in a separate statement Tuesday that the 83 locations there would remain open.
Toys 'R' Us filed for chapter 11 bankruptcy protection in September, hurt by competitors including Wal-Mart Stores Inc. and Amazon.com Inc. The company also contended with heavy debt, stemming from a leveraged buyout in 2005.
In that deal, private-equity firms Bain Capital and KKR & Co. and real-estate investment trust Vornado Realty Trust took Toys "R" Us private for $6.6 billion, which included more than $5 billion in debt.
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(END) Dow Jones Newswires
January 24, 2018 01:22 ET (06:22 GMT)