Toys 'R' Us Plans to Close Around 180 U.S. Stores This Year
January 24 2018 - 1:37AM
Dow Jones News
By WSJ Staff
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.
Write to copydesk@dowjones.com
(END) Dow Jones Newswires
January 24, 2018 01:22 ET (06:22 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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