Geoffrey the Giraffe is out of a job, along with about 33,000 other Toys “R” Us employees, according to multiple outlets including USA Today and CNN.
After 70 years in business, the iconic toy retailer — once proclaimed as “the world’s greatest toy store” — will shut down or sell off the remainder of its 735 stores in the United States, according to U.S Bankruptcy court documents filed early Thursday and obtained by CNN.
It also comes six months after Toys “R” Us filed for Chapter 11 bankruptcy, in an effort to shed $ 5 billion it had accumulated in debt and reinvest the $ 400 million it was spending a year to pay that off, into its stores, CNN reported.
Originally, the troubled toy chain had hoped to keep some locations in the U.S. open — announcing in a letter to customers in January that 182 stores would be closing the following month, according to Business Insider.
“The reinvention of our brands requires that we make tough decisions about our priorities and focus,”Toys “R” Us CEO Dave Brandon wrote in his memo, according to Business Insider. “The actions we are taking are necessary to give us the best chance to emerge from our bankruptcy proceedings as a more viable and competitive company.”
But according to court filing, the company still didn’t have the money to operate that many stores and was spending $ 50 to $ 100 million a month, USA Today reported.
“The stark reality is that the Debtors (Toys “R” Us) are projected to run out of cash in the U.S. in May 2018,” documents say, USA Today reported. “ have determined that the best way to maximize their recoveries is to liquidate the existing inventory in all…735 remaining U.S. stores and begin an orderly wind-down of the U.S. operations.”
They added they only have money to pay their employees for “no fewer than 60 days,” USA Today reported.
Though Toys “R” Us was once one of the go-to places for families to do their toy shopping, the retailer has struggled to compete against online stores like Amazon, as well as big chain companies like Walmart and Target.
As the Chicago Sun-Times previously noted, the store has had difficulties capturing the attention of children who can now find entertainment in a smartphone or tablet.
Toys “R” Us began in Washington, D.C. in 1948 as a small store. The business is now headquartered in Wayne, N.J.
Shoppers can expect liquidation sales over the next few months, The New York Times reported.
On Wednesday, the company announced it was also closing all its stores (approx: 100) in the U.K., The Washington Post reported.
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