Toys R Us, the American retailer who once dominated the international toy market, declared bankruptcy on Monday night.
The company, which has $400 million in debt, is struggling to keep up with online retailers like Amazon, Walmart, or Target, writes the Financial Times.
The company said, at one point, they became forced to invest no less than $3 billion in order to maintain 1.600 stores on track, “as before” as the company tries to go online.
Traditional traders have suffered great losses, especially when it comes to their popularity rate since the incredible rise of e-commerce – especially those companies that have accumulated heavy debt in the years of crisis.
Toys R Us, established in the 1950’s, grew and turned into a toy store that dominated the US market but failed to keep up with the online environment.
“Today marks the start of a new era,” said Dave Brandon, chief executive of Toys R Us.
“The financial constraints that have kept us back will be addressed in a sustainable and efficient way,” added the CEO.
The New Jersey-based company hired Kirkland & Ellis to help it into their restructuring process.
Toys R Us recorded reported a total loss of $164 million in sales of $2.2 billion in June.
Suppliers, in turn, became cautious, limiting shipments to Toys R Us, according to those familiar with the problem.
The toy industry has had a really tough year because numerous products have been linked to Hollywood movies that have failed to meet the box office’s goals.