Things appear to be going from bad to worse for the beleaguered US arm of Toys R Us as a further 200 stores look set to be closed.
ToyWorld Mag takes a look at these reports from CNBC and the Wall Street Journal.
The Wall Street Journal has reported that Toys R Us plans to close an additional 200 locations and lay off what has been described as “a significant portion of its corporate staff.”
The retailer previously announced that around 180 stores would be closed in April, resulting in 4,500 workers losing their jobs. The 200 newly-reported planned closures would be in addition to the April closures, and would impact in-store workers in addition to corporate staff.
Meanwhile, CNBC has reported that Toys R Us is potentially at risk of breaching the covenant on one of its loans. The retailer secured a $3.1 billion loan from a group of lenders led by J.P. Morgan Chase prior to filing for bankruptcy protection. The report does, however, state that the retailer is currently in compliance with its loan terms, and has a number of options afforded to it before breaches the covenant. These options include getting financing elsewhere, so its cash balance does not breach the loan terms, or renegotiating the debt terms with its lenders.
