Toys “R” Us, a giant toy-store chain with stores in Santa Rosa, San Rafael and Vallejo, filed for bankruptcy on Monday under Chapter 11, barely three months before the crucial retail holiday shopping season when most toys are purchased. An estimated 40 percent of the company’s net sales come from the holiday quarter.
The company, which has nearly 1,600 stores and 64,000 employees, aims to restructure some $5 billion in long-term debt. Its revenue is nearly $12.4 billion.
In the company’s annual report for full-year 2016 in April, consolidated net sales were down 2.2 percent for the full year driven by softness in the entertainment category.
“Despite a strong start to the holidays, in the weeks following Black Friday we faced a combination of sluggish sales and intense promotional activity,” said Dave Brandon, chairman and CEO of Toys “R” Us. The “tough retail environment this holiday and continued weakness in the entertainment and baby categories contributed to the erosion of our top line and an overall disappointing year,” Brandon said.
The company, based in Wayne, New Jersey, was started in 1948 by Charles Lazarus. Brandon has been CEO since 2015. Toys “R” Us is privately owned by KKR, Bain Capital and Vornado Realty Trust. The company was taken private in 2005 in a leveraged buyout for about $1.3 billion.
In Santa Rosa, Toys "R" Us has a store on Santa Rosa Avenue. The company's San Rafael store is on Francisco Boulevard, and its store in Vallejo is on Plaza Drive.
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