Employees and customers of Toys “R” Us Mount Gravatt need not worry after the retailer’s parent company filed for bankruptcy in the United States.
Toys “R” Us Australia assured that it is business as usual at its local stores, including Mount Gravatt and 39 other stores spread across the country.
“The company’s operations outside of the US and Canada, including its operations in Europe and Australia and its approximately 255 licensed stores and joint venture partnership in Asia, which are separate entities, are not part of the Chapter 11 filing,” said a statement from the parent company.
Pressure from Debt
The recent move by Toys “R” Us to file for Chapter 11 bankruptcy came as the company gave in to pressure from debt of more than $US5 billion. Under Chapter 11, the company hopes to restructure $US400 million in debt that is due next year.
Some analysts believe that the largest toy retail chain in America is just one of the growing number of retailers that fell victim to the rise of e-commerce. However, some put the blame on its inability to innovate to improve its competitiveness.
Toys “R” Us posted net loss of $US164 million in the quarter ending 29 April. The company has not reported annual profits since 2013.
The Australian stores are doing much better as it reported net sales of $US207 million in the year ending January 2017.
The bankruptcy filing will also not deter the plan of Toys “R” Us Australia to open four new stores in the country by Christmas 2017. One of the new stores will be in the greater Brisbane area in North Lakes.
