The Toys R Us bankruptcy filing has raised questions over the jobs of 64,000 employees in almost 1,600 stores. Toys R Us filed in the US and Canada for bankruptcy protection while it tries to restructure its debts. Job losses may be possible, but bankruptcy deal should see it through.
Toys R Us has filed for bankruptcy protection in the US and Canada as it attempts to restructure its debts. The company has been finding it very difficult to compete with large online firms such as Amazon. At one time Toys ‘R’ Us was a big player in the North American toys market, but it is now struggling.
Toys R Us bankruptcy Filing Affects US Stores Only
In an attempt to give it time, a loan of over $2 billion has been approved by a US bankruptcy court. This might enable Toys R Us to get ready for the Christmas and Holidays shopping season. The company’s European operation is not part of the bankruptcy filing, and it does not expect the UK to be affected at least for now. The same is true of the 255 stores in Australia that are licensed to sell Toys R Us goods, and neither should the Asian joint venture be affected.
This is yet another indication of the way in which traditional stores are being squeezed by multinational online businesses who sell directly online, or as third-party distribution services. Online retailers are continually taking market share from traditional mall stores.
Toys R Us Online Retail Service
According to Toys R Us, most of its stores remain profitable, and it is just about to enter the most profitable time of year for its products. However, the firm is not blind to developments, and it has recently launched an online retail service. It hopes that this will be able to compete with Amazon and other online stores.
It is generally becoming accepted that internet outlets are rapidly growing and will ultimately become practically the only form of retailing. Eventually, mall stores will become useful for convenience shopping only. Perhaps not soon, but it seems to be the future of retailing. Even now, many grocery stores are focusing on online operations with delivery to the buyer’s home.
Change to Online Shopping
In fact, many convenience stores are picking up business while large shed-based supermarkets are losing visitors. People appear to want either local convenience stores or to order online for home delivery. Toys R Us is just discovering this change in shopping habits. However, it is large enough to be able to overcome this issue. Meantime the Toys R Us bankruptcy deal should see it through the coming holiday season.
