Toys ‘R’ Us Misses Vendor Payments

Toys ‘R’ Us Misses Vendor Payments

Toys “R” Us Inc. has missed payments to some suppliers in recent days as the U.S. division heads toward a likely liquidation, according to people with knowledge of the situation.

The retailer, which

filed for bankruptcy
in September, has stopped making the payments without providing an explanation, said the people, who asked not to be identified because the matter is private. Some of the people said they can’t get anyone at Toys “R” Us to respond to questions.

The company, which faces

a $5 billion debt load
, also recently stopped negotiating settlements with vendors on money owned before it filed for bankruptcy, some of the people said.

How a Toys ‘R’ Us liquidation threatens to curb toymakers’ innovation

A representative for Wayne, New Jersey-based Toys “R” Us declined to comment.

The bleak situation lends evidence to the notion that Toys “R” Us is moving toward winding down its U.S. operations for good. Bloomberg

last week that the retailer was making preparations for a liquidation of its domestic business.

The company has failed to find a buyer or reach a debt restructuring deal with lenders, leaving it with few options, people familiar with the situation said at the time. A hearing in bankruptcy court is scheduled to be held on Thursday, after being delayed.

The struggles of Toys “R” Us have taken a toll on the two largest toymakers, Hasbro Inc. and Mattel Inc. Shares of those companies fell on Friday after Bloomberg reported about the possible liquidation, then dipped again today over concerns about missed vendor payments.

Hasbro fell less than 1 percent to $89.73 as of 2:47 p.m. in New York, while Mattel dropped 3 percent to $14.54.

Read More

Previous ArticleNext Article

Send this to a friend