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Toys ‘R’ Us Files for Chapter 11 Bankruptcy

Aalia Babar, Writer

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“Magical!”

The one word I would use to describe the childhood experience of walking into a Toys ‘R’ Us. The overwhelming feeling you get being surrounded by toys – instinctively knowing they had to be yours. “Toys are Us” became “Toys For Me.” Sadly, this isn’t the case anymore.

On September 18, 2017, Toys ‘R’ Us filed for Chapter 11 bankruptcy. What does this mean? Well, Toys ‘R’ Us spent too much money, and ended up in crushing debt. A Chapter 11 bankruptcy generally proposes a plan for reorganization of a company to keep the business alive, paying creditors over time, and seeking relief.

However, just because Toys ‘R’ Us has filed for bankruptcy doesn’t mean they are closing. The company filed for Chapter 11 bankruptcy to reorganize and restructure about $5 billion in debt. “At Toys ‘R’ Us, we’re taking the right step to ensure that the iconic Toys ‘R’ Us brand lives on for many generations,” a company spokesperson posted on Facebook. “Most importantly-it’s business as usual! All of our stores around the world are open, and you can continue to shop online.” Therefore, it is not a death sentence for the company, yet…

The contributing factors that hurt Toys ‘R’ Us are threefold–Walmart, Amazon, and movement to online games and toys. The supply chain magicians at Walmart and Amazon are able to bring the same products to consumers cheaper and more efficiently. Parents will accept waiting a day or two for an item if it relieves them of dragging a screaming kid out of the Toys ‘R’ Us doors. The generation of kids playing with toys are far more interested in the latest app on their parent’s iPhone, rather than playing with dolls and actions figures. Hopefully, Toys ‘R’ Us can revamp its business model to stay afloat in this digital age.

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Toys ‘R’ Us Files for Chapter 11 Bankruptcy