Toys ‘R’ Us investors in talks to salvage some US stores: report

Toys ‘R’ Us is seeking ways to salvage at least some of its U.S. stores, despite the impending liquidation of its domestic operations, according to a report this week.

The New Jersey-based toy retailer’s investors are mulling whether to maintain a slimmed-down version of the Toys ‘R’ Us brand while selling most of its U.S. stores, the New York Post reported. It’s unclear how many stores could continue to operate if the plan moves forward.

“I don’t think the company will be a total liquidation – just smaller,” one source familiar with the situation told the Post.

Toys ‘R’ Us has a bankruptcy court hearing on Thursday, one day after it disclosed to employees that it would close or sell all of its 735 U.S. stores amid declining sales and mounting debt. The liquidation process is set to begin after the hearing. The retailer filed for bankruptcy last September, citing a long-term debt load in excess of $5 billion.

While the report suggests some Toys ‘R’ Us investors are interested in salvaging the brand, some creditors are purportedly pressuring the company to liquidate as soon as possible.

“[Some creditors] believe it is worth more dead than alive,” a source told the New York Post.

Toys ‘R’ Us has not commented on the possibility that some stores could stay in operation. However, the company acknowledged that it had filed a motion in bankruptcy court to “begin the process of conducting an orderly wind-down of its U.S. business and liquidation of inventory.”

"I am very disappointed with the result, but we no longer have the financial support to continue the Company's U.S. operations,” CEO David Brandon said in a statement. “We are therefore implementing an orderly process to shutter our U.S. operations and will pursue going concern sales or reorganizations of certain of our international businesses, while our other international businesses consider their options."