Toys “R” Us Closes Its Doors Forever

Sadly, the beloved Toys “R” Us is closing its doors forever. The iconic toy store
has faced economic troubles for a long time, and now they are officially closing down all
of their 800 stores. David Brandon, Toys “R” Us’s chief executive said in a statement,
“This is a profoundly sad day for us, as well as for the millions of kids and families who
we have served for the past 70 years.”


Toys “R” Us advertises their closing down sale after decision to close all 800 of their locations. Courtesy of

When Toys “R” Us filed for bankruptcy this September, they never thought that
they would be closing all of their stores. They had hoped to find a way to restructure their debt and find a path forward, but a combination of factors lead to their downfall. Toys “R” Us has been under a tremendous amount of debt for years, an amount equal to
approximately $5 billion at the time they filed for bankruptcy. During the age of Amazon, many companies are having trouble competing with online companies. Amazon provides anything one can want with the tap of a finger. This makes it more practical for the busy parent to get a toy for their child on Amazon, versus going out to the store and picking one up. Toys “R” Us had ebitda (earnings before interest, taxes, depreciation, and authorization) of $374 million and $347 million in 2015 and 2016, respectively. In 2017 the debt was $81 million.

Many other corporations have been impacted by the closing of Toys “R” Us.
Businesses like Mattel Inc., Hasbro, and Lego are some of Toys “R” Us’s biggest
creditors. According to the publication Debtwire, Toys “R” US’s vendors collectively
have shipped at least $450 million in products to the retailer but have yet to be paid.

In addition, many people are going to lose their jobs as a result of the bankruptcy.
According to Debtwire, Toys “ R” Us employs over 33,000 people. When Toys “R” Us
filed their plans to wind down, thousands of lay off notices were sent to employees. The
big question was if employees would receive a 60-day severance package. Thomas
Mason, an employee at Toys “R” Us says the company has not alerted the workers as to
if they will receive any payments. He states, “My cousin and I started these jobs in
September as seasonal workers. After the holidays they offered to keep us full-time, and
we expected severance payments. Soon after, they said we wouldn’t be getting severance,
and it felt like they just tricked us.”

By: Julia Whitney’21, Staff Writer

Categories: News