Toys R Us closing all U.S. stores, jeopardizing 30,000 jobs
NEW YORK (KUSI) — After 70 years, Toys R Us is closing its doors.
The company that once boasted more than 2,000 stores in the United States plans to shut down its 740 U.S. stores over the next few months.
Struggling with falling sales and mounting debt, the company filed for Chapter 11 bankruptcy last year, crippled by the weight of $5 billion in debt. Earlier this year, Toys R Us announced plans to close 182 stores after tepid holiday sales.
Those closures included three stores in San Diego County. San Diego State marketing professor Miro Copic said the company’s troubles began when big box discount stores like Target and Walmart became more aggressive, offering lower prices.
As sales fell off, the company sought relief in 2005 with a $6.6 billion leveraged buyout by three private equity firms. Plans to take the company public again aftter a rebuilding phase never got off the ground because of the 2008 recession and the explosive growth of online retailer, Amazon. With debilitating debt levels, Toys R Us did not have the financial resources to revive its business.
Toys R Us has 30,000 employees in the U.S., including 400 to 500 in the San Diego area.
They are promised pay for the next 60 days if they show up for work.
KUSI’s Sasha Foo talked to some San Diego shoppers about the end of the line for the company that called itself “the greatest toy store there is.”