This Monday, Toys R Us is expected to appear at a bankruptcy hearing and shutting down all its stores and liquidating its entire U.S. operations is one of the options they are considering.
Upon entering bankruptcy last September, Toys R Us was planning to introduce a more efficient business model and scale down its existing debt repayments.
Now, sources say the company could go out of business because it is running out of cash and can't get anyone to help. Additionally, The Wall Street Journal reported that the retailer could close all its domestic stores.
Not enough kids want to be a Toys-R-Us kid. But, the news service noted, one of its sources cautioned "that the situation remains fluid".
While Toys "R" Us isn't out of the game just yet, the effects of its bankruptcy proceedings are already starting to show themselves.
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Toys R Us is facing more trouble overseas as well as the business entered into administration in the United Kingdom, which is a process that is similar to USA bankruptcy filings.
News of a possible Toys R Us liquidation sent the shares of toy makers down as of noon Thursday. The Canadian portion of the company filed for bankruptcy when the USA arm did. The liquidation will likely include Babies R Us as well. The interest payments-$400 million a year-left the company weak and ripe for toppling.
It started in 2005, long before e-commerce started pinching profits of brick and mortar stores.
The company was founded in 1948 and it grew into the largest USA toy chain. In the early 1990s, sales were increasing at a 10 percent annual clip.
