Toys R Us Possibly Filing Bankruptcy Due to Massive Debt
The popular children's toy store Toys R Us could be filing for bankruptcy, according to MSN. The company is roughly $400 million in debt and has hired a law firm to restructure those debts. Although the hiring of the firm isn't a definite sign that the company will file bankruptcy, it's definitely a real possibility.
With holiday season coming up, the restructure needed to be addressed. MSN reports that doing so "could give its major vendors such as Mattel (MAT) and Hasbro (HAS) clarity into the company's long-term viability to help ensure the toymakers continue to stock its shelves throughout the holidays."
Hopefully we wont see the demise of this retailer, as we have with many others. But with competition like Amazon, Wal-Mart, and Target, it will be a challenge. An article in Business Insider suggests that Toys R Us made two mistakes that ultimately led to its downward spiral. The first mistake was having a "below par website and general e-commerce proposition", unlike the competition. The second was spending too much on brick-and-mortar stores that can be expensive to staff and maintain.
Despite the suggested mistakes, one thing is certain. Toys R Us is in trouble. Hopefully with this team of lawyers, they can find a way out of it.