The days of being a Toys "R" Us kid are officially over.
The iconic toy giant said in a U.S. Bankruptcy Court filling early Thursday that it must liquidate, a move that will likely shutter or sell what’s left of its American stores and put nearly 33,000 jobs at risk.
The move came after the company failed to find a buyer or reach a deal to manage its massive debt.
While the closures are an immediate blow to the thousands of toymakers that rely on the chain to sell its products, many retailers already smell opportunity and are beginning to stock their aisles full of toys.
“Best Buy is expanding its toy selection,” Jim Silver, a toy expert and CEO of TTPM.com, tells FOX Business. “Party City is adding more toys. FAO is reopening. Kohl’s and JCPenney will carry more toys.”
Although Silver thinks the likely winners will be Amazon, Walmart and Target, he also suspects that one of the larger international toy chains such as U.K.-based Smyths Toys could be looking at the U.S. He added that he expects smaller specialty chains to expand.
Gerrick Johnson, a toy analyst at BMO Capital Markets, says that while a lot of big toymakers will be in limbo as Toys “R” Us slashes its prices during its liquidation phase, in the end brands such as Mattel and Hasbro will likely gain market share because of their scale.
“It will be harder for new products to emerge and for untested concepts to be tried out,” Johnson tells FOX Business. “So there will be disruption in the near term.”
Silver agrees, adding that overall this year will be “transitional” for many toy companies—big and small—but a Toys “R” Us shutdown could potentially force smaller, more niche companies out and give more momentum to the larger ones because they will most likely “get better shelf space” as a result.
Toys “R” Us attracted speculation over its liquidation after the company filed for bankruptcy protection last September. After a lackluster holiday season, the company announced in January plans to shutter a fifth of its stores—or 182 outlets—across the country.