Toys r no longer US

Toys R Us will liquidate

This one is unraveling in a hurry.

Sadly but not unexpectedly, Bloomberg is reporting that Toys R Us (“TRU”) is prepping to liquidate its US stores completely.  This news comes on the heels of two prior announcements of store liquidations. 

Store closures within a retail bankruptcy are expected.  And at a legacy retailer like TRU there will always be a subset of underperforming locations.  So in January, after the critical holiday season, TRU announced its plan to shutter 180 stores, or about 20% of its US locations.  While that was expected, the CEO’s acknowledgment of “operational missteps” during the holiday season was not.  And that was the first major clue to outsiders that things were worse than they appeared.

Then in late February, it came out that another 200 stores were on the block.  At the same time, CNBC reported that TRU could breach a covenant on its DIP loans after the poor holiday results.  Whether a covenant breach did or did not occur, it appears that lenders are unconvinced of a turnaround or sale.

Claims Trading

Claims trading in TRU really dried up after the second store closure announcement.  While there have been over 100 trade notices filed in the last quarter (ranking it 3rd in transaction volume), only 6 of those have been filed in the last month, with 2 in the last week.

Toys R Us vendors who want an assessment of held claims should call 312-766-2301 or email us to discuss.