Toys "R" Us Inc. CEO Dave Brandon confirmed to employees on Wednesday that the chain will be closing its U.S. operations, according to a person with knowledge of the matter, a move that leaves the nation without a major toy-store chain.
Brandon addressed workers at the company's headquarters in Wayne, New Jersey, laying out plans for an orderly shutdown of the business, the person said. The company will file a motion for the liquidation in bankruptcy court, according to the person, who asked not to be identified because the announcement isn't yet public.
Bloomberg reported on Thursday that the move was imminent, following unsuccessful attempts by the company to either find a buyer or reach a debt restructuring deal with lenders. Toys "R" Us's U.K. unit is also closing down after a bidder failed to emerge, but there's still hope for the Canadian operations. A group led by MGA Entertainment Inc. is contemplating a bid for that business.
Brandon told employees there were interested buyers for Canada, which has about 80 stores, the person said. He also said that deal could lead to some U.S. stores staying open and being run by the Canadian unit, according to the person.
The Wall Street Journal previously reported on the staff meeting.
The toy chain's U.S. division entered bankruptcy in September, aiming to re-emerge as a leaner business with more manageable debt. A new $3.1 billion loan was obtained to keep the stores open during the turnaround effort, but results worsened during the holidays, hindering the chain's viability.
The company entered this year with more than 800 stores in the U.S. -- under both the Toys "R" Us and Babies "R" Us brands. In January, it announced the shuttering of 180 locations.
-- Bloomberg News