Toys R Us files for Chapter 11 reorganization

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The chain's older suburban big-box shops will also be overhauled to give kids a chance to try out toys in the store. These vendors are eager for whatever remaining leverage they have against the might of Amazon and Wal-Mart, the bane of all companies focused on a single category of shopping.

"Foreign suppliers are, in fact, given an advantage because they don't abide by the law, whereas Canadian companies that abide by the law are not being paid", said Brzezinski, adding that the ruling affects US suppliers as well, under North American treaty agreements.

Toys R Us was "seeing significant weakness in demand for their products globally", Brandon said in June.

Toys "R" Us has been keen to let customers know that the "vast majority" of its approximately 1,600 stores around the world and its web portals will continue to operate as usual. In an interview, Chief Executive Officer Dave Brandon stressed the company's long history with manufacturers. "I really believe that", said Larian.

In the United Kingdom so far this year, according to data from the Centre for Retail Research, companies in administration so far this year has already exceeded the levels seen in 2015 and 2016, though the number of stores and employees affected has been less, but there has been a consistent pattern of a changing retail landscape since 2008.

A sales slowdown at Lego Group, one of the leading toy makers, also hurt the toy seller. The retailer is also going ahead with a plan to open more stores in some cities. In books, Borders went belly up, while Barnes & Noble Inc. remains.

What the future holds for Toys "R" Us isn't clear.

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Prior to filing, the chain secured more than $3bn in financing from lenders including a JPMorgan-led bank syndicate and certain existing lenders to fund operations while it restructures, according to a company statement.

The company has stressed that it will continue to carry the same amount of merchandise through the upcoming holiday season, and products will be delivered "in a timely fashion".

That means suppliers' support for the reorganization plan is key to emerging from bankruptcy, according to Noel Hebert, an analyst for Bloomberg Intelligence. Toys R Us' Canadian subsidiary intends to seek similar protection under the Ontario Superior Court of Justice's CCAA. "They have got enormous debt". Since 2011, the retailer has opened 50 new toy stores as it expands out of Toronto to have stores in seven provinces.

In the toy business, the incentive is particularly powerful. It comes just as Toys "R" Us is gearing up for the holiday shopping season, which accounts for the bulk of its sales.

Mattel Inc closed up 1.2 percent and Hasbro Inc added 1.9 percent.

The Associated Press reported that GlobalData Retail estimates that in 2016 about 13.7 percent of toy sales were made online, up from 6.5 percent five years ago.

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