Toys "R" Us, the largest U.S. toy store chain, filed for bankruptcy protection on Monday, the latest sign of turmoil in the retail industry caught in a vise-like grip of online shopping and discount chains.
The Chapter 11 filing is among the largest ever by a specialty retailer and casts doubt over the future of the company's approximately 1,600 stores and 64,000 employees.
It comes just as Toys "R" Us is gearing up for the holiday shopping season, which accounts for the bulk of its sales.
Speculation on the looming Chapter 11 filing has been increasing in recent days. Last week, The Wall Street Journal reported the company would take the step before the key holiday selling season.
More than 300 retailers have filed for bankruptcy so far this year, according to data from BankruptcyData.com. Toys "R" Us joins retailers such as Payless, Gymboree and The Limited in filing.
Shares of Mattel (NYSE:MAT) lost 6% during the trading session, while Hasbro (NYSE:HAS) dipped nearly 2%.