retail news in context, analysis with attitude

The Wall Street Journal reports that expectations that Toys R Us could file for bankruptcy within weeks have led to “nervous suppliers” deciding to tighten terms for the retailer, “including holding back on shipments unless Toys ‘R’ Us is able to make cash payments on delivery.”

This development comes just weeks before the beginning of the crucial end-of-year holiday shopping season. “While Toys ‘R’ Us already has received a majority of its holiday shipments, it is still without a portion of the goods and could soon be cut off from receiving any fresh inventory,” the Journal writes. The holidays can account for as much as 40 percent of the retailer’s annual revenue, even as it faces toughening competition from both bricks-and-mortar and online retailers.

The Journal writes that Toys R Us “has been in talks with holders of more than $5 billion in debt to extend 2018 maturities and stave off a chapter 11 filing. Still, the company and its restructuring advisers are considering filing for chapter 11 protection in the U.S. Bankruptcy Court in Richmond, Va.”
KC's View:
I feel sorry for the folks who work at Toys R Us, but I have to admit that I feel absolutely no sentimentality about the days when my kids were young and I’d have to go there from time to time. I hated every time I went to Toys R Us, and I made the transition to Amazon as soon as I could.