Toys “R” Us is officially returning to the U.S. more than a year and half after filing bankruptcy.
Toys “R” Us will be opening two new stores in Houston, TX and Paramus, NJ. The stores will open just in time for the 2019 holiday shopping season. Richard Barry, CEO of Tru Kids Brands, which now owns Toys “R” US and Babies “R” Us, announced on July 18, 2019 that the company has more store openings planned for 2020[1].
Toys “R” Us declared Chapter 11 Bankruptcy on September 18, 2017. Toys ‘R’ Us shuttered all of its 700 plus stores in the U.S. and Canada in June 2019. The chain had struggled with debt and a consumer shift to cheaper online retailers. Toys “R” Us survived bankruptcy and continued operate approximately 900 stores in Europe and Asia. Toy “R” US benefited from Chapter 11 Bankruptcy by continuing to operate, restructuring secured debt, and partially repaying unsecured debt. Chapter 11 allowed Toy “R” US to remerge a financially healthier company that has learned from past mistakes. The new stores Toys “R” US plans to open will be smaller than their predecessors and with fewer toys. The stores will be in high traffic retail markets and will provide an interactive experience for customers, designed to bring customers back into brick and mortar stores.
In addition, Toy manufactures are excited about the prospect of Toy “R” Us making a comeback. Sales at Mattel and Hasbro tumbled after Toys “R” Us declared bankruptcy.
Many business leaders believe a case filed under Chapter 11 of the United States Bankruptcy Code, to be the end of the business’ life. However, this a widespread misconception. Many businesses file Chapter 11 for the exact purpose of keeping the business alive. A business can file Chapter 11 and continue to operate while restructuring its debt. Chapter 11 can result in a leaner and more financially stable business with lower debt maintenance. Toys “R” Us is a good example of how a business can remerge from Chapter 11.
If you’re a big or small business that is struggling financially, you may want to consider filing Chapter 11 Bankruptcy. Contact the experienced litigation attorneys at Goosmann Law in our Sioux City, Sioux Falls, and Omaha office to learn more about your options.
[1] Valinsky, J. (2019, July 18). Toys ‘R’ Us is Coming Back to the United States. CNN, Retrieved from http://www.cnn.com
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