Despite bankruptcy, Toys ‘R’ Us will remain open

Popular retail chain Toys ‘R’ Us will remain open despite reports that it filed for bankruptcy-court protection, The Straits Times reported. However, the toy chain admitted that they are currently encountering issues with their operations.

The toy retailer will remain open to the public mainly because toy manufacturers such as MGA Entertainment, Hasbro, and Mattel rely on the store to sell their products.

Toys ‘R’ Us has more than 1,000 stores around the world, the report added.

An official statement has been released by toy manufacturer MGA Entertainment regarding the issue. Founder and chief executive officer Isaac Larian told The Straits Times, “[Toys ‘R’ Us] is very important and people don’t understand... There is no toy business without Toys ‘R’ Us.”

Larian added that it is the only retail store that children turn to when they need to purchase toys. The store will continue its normal operations despite the filing of bankruptcy protection.

Sales performance

Toy manufacturers could not imagine their business operations when the toy chain giant chooses to close its stores, CNBC reported.

Market research analyst Juli Lennett said that children “will continue to make their holiday wish lists” and “put these new toys under the Christmas tree.”

Toys ‘R’ Us will continue to open even until the holiday season. Moreover, sales in the past few quarters have not stumbled even. According to CNBC, toy sales last year reached $27 billion and are expected to increase by 4.5 percent.

However, with the filing of the Bankruptcy Protection, Toys ‘R’ Us admitted that there are challenges in the retail this year, the report noted.

Bankruptcy filing

After these bankruptcy issues, there are also other lenders who refuse to ship the products of these toy manufacturers toward the stores because of “having trouble pricing the risk of doing business with the chain,” New York Post reported.

This decision made by lenders has led to toy products piling up in various ports because of the directive not to ship them towards the store branches and distribution centers. Insiders revealed that these lenders are still examining the risks and are yet uncertain about pricing their loans, therefore deciding not to deal with any shipment until further notice, New York Post added.

Toys ‘R’ Us filed for Chapter 11 on September 18. More details are expected to be released in the next few days.