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Is Toys R Us Closing? Does Bankruptcy Mean Going Out of Business?

Toys R Us will remain open

By William White, InvestorPlace Writer


Customers that have concerns about shopping at Toys R Us for the holidays following its bankruptcy announcement have nothing to worry about.

Is Toys R Us Closing? Does Bankruptcy Mean Going Out of Business?

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A recent announcement from Toys R Us that it is filing for Chapter 11 bankruptcy protection may have some shoppers spooked. However, the company says that it will continue to operate as normal while undergoing the process.

Toys R Us specifically notes that it will continue to operate all of its 1,600 stores around the world during the bankruptcy. It also points out that its online stores for Toys R Us and Babies R us will remain open. The retailer also says that the bankruptcy filing won’t affect members of its rewards and loyalty programs.

Just because a company files for Chapter 11 protection, that doesn’t mean it will be closing its doors. Many companies use bankruptcies as a time to restructure their business. Sometimes this results in the company returning stronger than before, but there are cases where stores close down during restructuring.

Toys R Us is looking to come out of bankruptcy protection once it has finished its restructuring process. The company also notes that it has received a commitment for $3 billion in debtor-in-possession financing. This financing will allow it to continue normal operations as it navigates through its Chapter 11 bankruptcy.

Toys R Us also says that it will continue to treat employees the same during its bankruptcy. This means that employees will still receive pay and benefits. It is also planning to keep inventory levels normal and continue paying suppliers.

You can learn more about the Toys R Us bankruptcy, including how the company got to this point, by following this link.

As of this writing, William White did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media, https://investorplace.com/2017/09/bankruptcy-is-toys-r-us-closing/.

©2018 InvestorPlace Media, LLC