Toys R Us filed for Chapter 11 bankruptcy protection on Monday, but stressed that its stores and online marketplace will operate as usual during the upcoming holiday season.
The company announced in a statement that its approximately 1,600 Toys R Us and Babies R Us stores worldwide will not be affected by the bankruptcy filing, easing fears that the biggest toy store chain in the world would not be an option for Christmas shopping this year.
"As the holiday season ramps up, our physical and web stores are open for business, and our team members around the world look forward to continuing to put huge smiles on children’s faces," CEO Dave Brandon said in a statement.
Toys R Us filed for Chapter 11 as part of a financial restructuring of $4.9 billion in debt, including a $400 million interest payment due next year and a $1.7 billion interest payment due in 2019.
"We are confident that these are the right steps to ensure that the iconic Toys R Us and Babies R Us brands live on for many generations," Brandon said.
The company is the latest to feel the crunch of slowing foot traffic in malls and the competition from online giant Amazon, which has become the top toy seller in America. They are also revamping their approach as more kids choose tech items over traditional toys.
While several generations have memories of being "Toys R Us kids," combing the aisles in search of a coveted toy, changing buying habits have also affected the company.
"Millennial parents shop more online than Generation X and Baby Boomers,'' Matt Townsend of Bloomberg News said on TODAY Tuesday. "They're actually going to Amazon, even Walmart.com, more than they are Toys R Us."
The iconic toy seller isn't the only one struggling, as the stock of toymakers Mattel and Hasbro fell 6.2 percent and 1.7 percent, respectively, upon the news of the bankruptcy filing by Toys R Us on Monday.
Lego also announced 1,400 layoffs last week as a result of a sales decline in the first half of the year.
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