Toys ‘R’ Us, which has more than 1,600 shops worldwide and 64,000 members of staff, has been struggling with customers switching to shopping online rather than taking to the high street.
The retail giant has now announced its north American arm is seeking “Chapter 11 protection” from the US Bankruptcy court.
On its website it stated its 1,600 Toys ‘R’ Us and Babies ‘R’ Us locations would operate “as usual”, and that it would work with its investors to address roughly $5billion in debt.
The move will allow the company to restructure its business so it can tackle it debts.
But how will Toys ‘R’ Us filing for bankruptcy in the US affect UK stores and jobs?
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Express.co.uk has contacted the retailer to detail how business and customers will be affected in Britain.
It is believed operations in Australia and Europe and a join venture in Asia are are not part of the bankruptcy proceedings, as reported by the BBC.
In a statement on its website, Dave Brandon, chairman and chief executive officer, said: “Today marks the dawn of a new era at Toys ‘R’ Us where we expect that the financial constraints that have held us back will be addressed in a lasting and effective way.
“Together with our investors, our objective is to work with our debt holders and other creditors to restructure the $5 billion of long-term debt on our balance sheet, which will provide us with greater financial flexibility to invest in our business, continue to improve the customer experience in our physical stores and online, and strengthen our competitive position in an increasingly challenging and rapidly changing retail marketplace worldwide.
“We are confident that these are the right steps to ensure that the iconic Toys ‘R’ Us and Babies ‘R’ Us brands liv eon for many generations.”
Toys ‘R’ Us is not the only retail giant this year to announce it was having problems since the rise of online shopping.