Embattled toy and game retailer Toys R Us may close 100 U.S. storefronts following weaker-than-expected holiday sales, Bloomberg reported Monday (Dec. 18).
Store sales for the Wayne, New Jersey-based firm have declined 15 percent this holiday shopping season compared to last, and the number of brick-and-mortar toy stores shuttering after the holidays could reach as high as 200. Toys R Us operated 879 U.S. locations in January 2017.
“Final decisions about our real estate portfolio will be done only after careful consideration about the best interests of our business,” said Toys R Us spokeswoman Amy von Walter. “Any speculation on that figure is premature and likely to be inaccurate.”
The toy retailer declared bankruptcy in September, and has since been on a campaign to revitalize sales and bring more consumers back into the stores. It announced at the time that it would level up its eCommerce efforts “to better reflect its brand, promote the hottest toys and provide improved delivery capabilities so Toys R Us can effectively compete in the online shopping space.”
Less-than-optimal holiday sales numbers may put a dampener on those plans, however.
Toys R Us received a $3.1 billion infusion from a group of lenders led by JPMorgan Chase that allowed it to announce new steps in its post-bankruptcy restructuring, including a Times Square pop-up shop and adding play zones to its storefronts. In addition, the company partnered with global marketplace solutions provider Mirakl to create a new online marketplace with enhanced customer touchpoints to “get merchandise into shoppers’ hands faster.”
A closure of Toys R Us locations would impact suppliers like toymakers Hasbro and Mattel, both of which saw session lows on Monday and declines of 3.2 and 4.5 percent, respectively.
Toys R Us recently announced its U.K. arm would be shuttering at least 26 brick-and-mortar locations, unrelated to the U.S.-based company’s bankruptcy issues. The U.K. entity is looking to right-size its retail spaces and bolster its online operations while doing away with warehouse-style storefronts.