Toys R Us may be facing liquidation in the US

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Toys R Us may be facing liquidation in the US
Image credit: Flickr (CC) / Mack Male

The news about Toys R Us seem to be getting worse and worse. The latest about the popular chain of toy stores is pretty bleak. It appears Toys R Us may be facing liquidation of all US stores.

At least this is what sources are telling CNBC. The station adds that it’s still a fluid situation and liquidation is not a guarantee.

Still, the news are pretty drastic from what we had a couple of weeks ago. The original plan is still to have Toys R Us break even before the holiday shopping spree of 2018.

But with news about liquidation, such development seems more and more unlikely. The news also affects other companies. Shares of Hasbro fell more than 3% because of the news. The shares of Mattel saw a nearly 5% drop. Both companies are among the biggest debtholders of Toys R Us.

The situation is said to have worsened after the bad holiday season. It hurt Toys R Us’ chances of recovery and some debt holders started pushing for liquidation, CNBC adds.

Currently Toys R Us is in the process of closing down stores and selling off their stock. It’s a way to reduce expenses and try and rake in some cash for its $4.9 billion debt. Currently Toys R Us remains under bankruptcy protection and seeks more ways to improve its financial stability. This also includes renegotiations about store leases where possible.

Still, it seems the problem is bigger and more difficult to fix than expected. Hopefully the company will manage to get through it. For now though, things seem quite bleak.