A report is saying that retailer Toys “R” Us will close dozens of stores, leaving thousands of workers out of a job, across the United States.
Toys “R” Us experienced “a disappointing holiday sales season” as part of its rationale to close more locations, the report said.
The Journal, however, reported that even more stores could be closed, adding that store managers will be asked to tell workers that “there are no severance benefits being provided for the store-closing process.”
All 83 Toys “R” Us stores in Canada will remain open, according to the president of the Canadian unit, Melanie Teed-Murch, in a letter to customers, Reuters reported.
The firm also said it is planning to remodel some of its locations, combining Toys “R” Us stores with Babies “R” Us stores.
Toys “R” Us is facing growing competition from regional independent toy stores as well as online giant Amazon.com.
The company filed for bankruptcy protection just ahead of the 2017 holiday season in the United States and Canada to restructure $5 billion of long-term debt, casting doubts over the future of its 64,000 employees and nearly 1,600 stores. The bankruptcy is also causing headaches for two of Toys “R” Us’s biggest suppliers, toymakers Mattel and Hasbro. Toys “R” Us was Mattel’s second-largest customer in 2016, representing 11 percent of its total sales.
Last month, D.A. Davidson analyst Linda Bolton Weiser said she expected the store closures to hit Barbie-maker Mattel’s 2018 estimated sales growth by 1.5-2 percent, assuming shipments that would have gone to Toys “R” Us are not picked up by other retailers.
