Toys R Us announced today that it will close or sell all of its stores in the United States.
There are nine Toys R Us locations in Washington state, including in Puyallup, Tacoma, Bellevue, North Bend, and Lynnwood. Babies R Us stores, which also will shut down, exist in Olympia, Tacoma, Tukwila, and Lynnwood.
“I am very disappointed with the result, but we no longer have the financial support to continue the company’s U.S. operations,” Toys R Us CEO David Brandon said in a statement. “This is a profoundly sad day for us as well as the millions of kids and families who we have served for the past 70 years.”
Although the company filed for bankruptcy late last year, it still operates over 700 Toys R Us and Babies R Us locations. The closures could eliminate approximately 33,000 jobs across the United States.
Some have speculated that Amazon’s rise to power was what inevitably put Toys R Us out of business. But that might not be the case.
A report released by comScore and the Census Bureau stated that only about 16 percent of toy sales occur online. While Amazon’s increased prowess in the toy-selling market probably didn’t help matters, it likely was not what brought Toys R Us to the dire place it is today.
What almost certainly did contribute to the company’s demise was its crippling debt.
Brandon stated in his declaration during the company’s 2017 bankruptcy filings that Toys R Us “has been operating for more than a decade with significant leverage, necessitating the use of substantial amounts of cash each year (approximately $400 million) to serve the more than $5 billion of funded indebtedness.”
He went on to say that the company’s debt hampered its ability to invest and improve for the future, which only further hurt business.
“The Company has fallen behind some of its primary competitors on various fronts, including with regard to general upkeep and the condition of our stores…” Brandon stated in his declaration.
The timeline for the closures is still to be determined, Toys R Us spokeswoman Nicole Hayes told 425 Business. Gift cards still will be honored, but only for the next 30 days.