The Associated Press
Published Wednesday, January 24, 2018 8:32AM EST
Last Updated Wednesday, January 24, 2018 12:27PM EST
NEW YORK -- Toys "R" Us, squeezed by Amazon.com and huge competitors like Walmart, will close 20 per cent of its U.S. stores within months.
Hobbled by $5 billion in debt, the company that once dominated toy sales in the U.S. filed for bankruptcy protection in September.
Chairman and CEO Dave Brandon said in a letter that tough decisions are required to save Toys "R" Us.
Industry analysts said around 180 of the company's 900 locations in the U.S. will be shuttered.
The company did not immediately return a message early Wednesday.
Brandon said that the store closings will begin in February and the majority of the targeted locations will go dark by mid-April. At other locations, the retailer is combining its Toys "R" Us and Babies "R" Us stores.
Meanwhile, Toys "R" Us Canada president Melanie Teed-Murch said all 83 stores are open for business.
"Since the initiation of our September court proceedings, our primary focus has been reimagining our business with you, our customers in mind and ensuring a normal course of operations," Teed-Murch said in an open letter to customers. "Our team is hard at work strengthening our competitive position and making the improvements necessary to ensure that we have the products when, where and how you choose to shop with us."
Toys "R" Us, based in Wayne, N.J., 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.
Toys "R" US isn't alone. Around three dozen retailers sought bankruptcy protection last year due in large part to a radical shift in consumer behaviour, both in where they shop, and what they buy. Some of the companies that have gone under have been small, but there are also big retailers on the list, like Payless Shoe Source, Gymboree Corp. and True Religion jeans.
Toys "R" Us closed its flagship store in Manhattan's Times Square, a huge tourist destination, about two years ago.
Brandon said Wednesday that the company made some missteps during the critical holiday shopping season.
"As the leader of this company, I want you to know that we can and will address the gaps in the experience that you may have had when shopping this holiday," Brandon said. "My team is already hard at work to make the improvements necessary to ensure that we have the products you want, when, where and how you want them."
-- With files from The Canadian Press