Toys “R” Us Closing 20% of U.S. Stores: Going Out of Business Sales to Begin in February

Toys "R" Us Closing Stores

The bankruptcy of Toys “R” Us, Inc. has claimed nearly 200 more stores as the company continues to search out ways to reduce its substantial debt and emerge from its reorganization process on a path toward solvency. Toys “R” Us closing stores is nothing new, with the company shuttering hundreds of stores since it first announced its bankruptcy filing and reorganization plans.

The Toys “R” Us bankruptcy, at this point, has not only led to the closing of hundreds of stores, but to the loss of thousands of jobs as well. Toys “R” Us debt is the main motivator for these moves, as the company struggles to get out of a roughly $5.0-billion hole. The company is having a Toys “R” Us going-out-of-business sale starting February and ending in April.

As many as 182 stores are being slated for shutdown according to court documents filed late on Tuesday, as part of the Toys “R” Us bankruptcy plan.

With Toys “R” Us closing stores across the country, the company will shrink its total number of stores by about 20%.


“The reinvention of our brands requires that we make tough decisions about our priorities and focus,” Toys R Us Chief Executive Officer Dave Brandon said in a letter posted on the company’s website Tuesday night.

Not all 182 stores are guaranteed to close, however, as the company is currently attempting to negotiate more favorable lease terms. Should those negotiations work out in the company’s favor, then the total number of store closings may be reduced.

Still, the majority of the 182 locations are likely to shutter as the company looks to reinvent itself. Toys “R” Us closing stores is a move being implemented to create a leaner, more efficient company.

The company will also convert a number of locations into combined Toys “R” Us and Babies “R” Us stores.

Toys “R” Us closing stores was not the only bit of news for the beleaguered toy seller on Tuesday; the company also won Bankruptcy Court approval of a plan to pay landlords up to $1.3 million in order to extend store leases beyond an April 16 deadline.

The company argued that it needed more time to decide precisely which of its approximately 880 U.S. stores would be closed.

“Our primary focus is on reimagining our business with you in mind,” the company released in an earlier memo by CEO Brandon. “We want to make it easier for you to shop with us, whether online or in our stores. This past season, we were successful in accomplishing this objective for millions of customers.

“However, there were also far too many transactions where this wasn’t the case – due to our operational missteps.”

Earlier Toys “R” Us Announcement on Store Closings in 2018

Weak Toys “R” Us holiday sales prompted an earlier announcement that more than a hundred U.S. stores would be shuttered.

After the company filed for bankruptcy in September, a few short months later in late December, Toys “R” Us store closings in 2018 were announced. The move came as the company reported a disappointing holiday season. Holiday sales are a critical part of most retail businesses, often making up a sizable chunk of total yearly sales.

In the U.S. alone, the company’s sales declined by about 15% compared to a year earlier.

“Final decisions about our real estate portfolio will be done only after careful consideration about the best interests of our business,” said spokeswoman Amy von Walter, as reported by Bloomberg. “Any speculation on that figure is premature and likely to be inaccurate.”

With Toys “R” Us closing stores at an ever-increasing rate, where the company ends up as a result of its major restructuring and bankruptcy process is, at this point, still uncertain.



Bankruptcy fallout: Toys R Us closing up to 182 stores,” USA Today, January 24, 2018.

Bankrupt Toys ‘R’ Us Weighs Closing at Least 100 Stores,” Bloomberg, December 18, 2017.

A Message to Our Customers,” Toys “R” Us, last accessed January 24, 2018.