Toys “R” Us Canada has filed for creditor protection in the Ontario court to reorganize. The news comes after the retailer had closed 53 stores it deemed unprofitable during the past two years.
Toys “R” Us Canada currently operates 22 stores and recently shuttered nine locations with leases still in effect.
The company’s online retail operations have been suspended.
Court filings in the Ontario Superior Court of Justice show Toys “R” Us Canada has $160 million in debts, including roughly $120 million owed to its vendors.
Toys “R” Us Canada said it experienced a “significant” decline in revenue, which resulted in “severe liquidity and working‑capital constraints,” according to court documents. The retailer indicated that increased competition from big-box stores and online retailers led to reduced revenues and weak consumer demand.
“After careful consideration of all reasonably available alternatives, TRU Canada has sought creditor protection under the CCAA [Companies’ Creditors Arrangement Act] to obtain a stay of proceedings as it evaluates its strategic alternatives and implements certain restructuring initiatives,” Toys “R” Us Canada said in a news release.
As part of its restructuring process, the company has appointed Neil Taylor as chief restructuring officer. Alvarez & Marsal Canada, Inc. has been appointed as the CCAA monitor.
Image courtesy Toys “R” Us
