US toy retail giant Toys R Us files for bankruptcy in US, Canada
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Thursday, September 21, 2017
On Monday night, New Jersey, US-based toy retail giant Toys R Us filed for bankruptcy in the US as well as in Canada. The retailer filed it from Richmond, Virginia for Chapter 11 bankruptcy code in the US, and a judge allowed a loan of over US$2 billion.
According to the filing, the retail chain owns US$6.6 billion in assets, but has a debt of US$7.9 billion. They were under a roughly US$5 billion debt since the company underwent a three-way acquisition in 2005. Kohlberg Kravis Roberts, Bain Capital, and Vornado Realty Trust acquired Toys R Us for around US$7 to US$7.5 billion. After the US judge approved a loan, Toys R Us received about US$3 billion from the lenders to continue the business and survive a competitive market, and restructure their business model. E-commerce giant Amazon.com, Walmart and Target are some of the competitors for the conventional ‘brick and mortar’ toy shop, with lower priced-merchandise and fast, cheap delivery. In a conference call in June, CEO Dave Brandon said “very, very aggressive pricing online” was causing problems. He also said the company was experiencing “significant weakness in demand for their products globally”. Toys R Us are to clear a debt of US$400 million by May 2018.
Toys R Us said they would continue to operate for the holiday season. Bankruptcy lawyer Jeff Gleit said Toys R Us “need to do both a financial restructuring as well as an operational restructuring” and “needs to modernize with the times”. Last holiday season, Toys R Us made sales around US$4.5 billion. Overall, the company reported a US$29 million loss in 2016. CEO Brandon said, “Our objective is to work with our debt holders and other creditors to restructure the US$5 billion of long-term debt on our balance sheet, which will provide us with greater financial flexibility to invest in our business”.
Toys R Us employs more than 60 thousand people in 38 countries around the world in more than 1600 stores. The company’s stocks fell by six percent after filing for Chapter 11 protection. US bankruptcy code Chapter 11 allows the company to restructure under a plan approved by the court. The company would also be shielded from creditors’ claims during the process. For the stores located in Canada, Toys R Us filed bankruptcy in Ontario and are to undergo reorganisation. However, 259 stores located outside the US or Canada will not undergo reorganisation, the company said.
Over 300 US-based retailers have filed for bankruptcy this year, and hundreds of stores closed.
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byAlma Abell
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February
25
Bush reacts to the Iraq Study Report
Bush reacts to the Iraq Study Report
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Friday, December 8, 2006
When introducing the Iraq Study Group Report to a Senate Committee, former Secretary of State James Baker emphasized that all the 79 recommendations in the report complemented each other and had to be taken together. This was not a “fruit salad” from which one could pick and choose. Despite this, President Bush is giving indications that he is going to do just that. While agreeing that the Report had some good points to make, he said that he had also asked the Pentagon, the State Department and other government agencies to reflect on the Iraq situation and report their conclusions to him.
The report proposes progressive changes to the role of the troops deployed in Iraq, from combat to the training of Iraqi forces and the withdrawal of all combat troops by early 2008, depending on local conditions. The President made it clear that matters concerning the deployment of troops were for the military to determine. A change of strategy is expected to be announced within the next few weeks.
Bush has said that he will not talk with Syria or Iran unless they meet certain conditions. Syria would have to “stop destabilizing” the government of the Lebanon. Iran must “verifiably suspend their nuclear enrichment program.” In declaring these conditions, Bush and Tony Blair, prime movers in the invasion of Iraq, are in agreement.
Tony Blair reflected that the report’s recommendations that settling the Arab/Israeli disputes in the area should be given priority. He has said that the key to solving the problems in Iraq, Lebanon, and elsewhere lay in settling the two-state disputes in Palestine. He announced that he would be visiting the region shortly. He would bring his experience in Northern Ireland to bear on the problem, indicating that persistence was needed to achieve reconciliation. President Bush said he supported this initiative.
Meanwhile, Israel’s Prime Minister, Ehud Olmert, flatly rejected the notion that there was any connection between the problems in Palestine and the situation in Iraq. He stated that the time may not be right for Israel to be negotiating with Syria and he reiterated Israel’s absolute opposition to Iran’s development of nuclear weapons. Robert Gates, the new candidate US Secretary of Defense, asserted that Iran is surrounded by nuclear powers, including Israel. Shimon Peres, Israel’s deputy prime minister, refused to affirm or deny whether Israel had a nuclear weapons capability, saying that such uncertainty was a defense in itself.
