Toys ‘R’ Us Canada Granted Extension, Plans More Store Closures
Toys “R” Us Canada has received an extension for its creditor protection, allowing it to explore additional store closures. Ontario Superior Court Judge Jane Dietrich approved the extension, granting the company the necessary time to stabilize its operations. This protection will last until May, enabling Toys “R” Us Canada to devise a plan for potential sale and investment opportunities.
Court Approval and Financial Challenges
The court approval provides Toys “R” Us Canada relief as it navigates significant financial difficulties. The retailer currently owes over $120 million to various creditors, including notable companies in the toy industry such as Lego, Hasbro, Mattel, and Spin Master Corp. Additionally, the company has substantial debts to prominent landlords including Cadillac Fairview and RioCan Holdings.
Store Closures and Liquidation Sales
- Toys “R” Us Canada has closed 53 stores in the last two years.
- Currently, only 22 stores remain operational.
- The retailer intends to close its Upper Canada Mall store by March 31 after agreeing on lease termination.
- Another closure is planned at the Niagara Pen Centre in St. Catharines, Ontario.
In addition to these closures, the company aims to conduct further liquidation sales at select locations. Judge Dietrich raised concerns about granting full permission to liquidate all remaining stores but eventually allowed Toys “R” Us Canada to proceed under specific conditions.
Staff Impact and Future Plans
As of its last creditor protection filing, Toys “R” Us Canada employed approximately 562 people. However, the workforce has decreased significantly due to layoffs. In recent months, 180 employees were let go, and after the initial creditor protection was approved, an additional 52 were terminated, leaving around 510 staff members.
Putman Investments, which acquired Toys “R” Us Canada in 2021, is currently working to market 11 out of 13 leased properties for sale. The company aims to restructure amid challenging economic conditions, including inflation and labor cost increases.
Toys “R” Us Canada continues to face uncertain times as it seeks to stabilize its operations and possibly find a new owner. The upcoming months are critical as the company navigates its creditor protection and evaluates its future in the competitive retail landscape.
