Remember Circus World, KB Toys and F.A.O. Schwarz? They were once toy retailers that are now no longer in business.
Hoping to avoid their fate, Toys R Us is looking to restructure its debt, and according to a Yahoo Finance, the retailer has hired a law firm to explore the possibility of a bankruptcy filing to do that.
Yahoo cites CNBC, which said Toys R Us is looking to restructure $400 million in debt that is due next year.
According to the story:
Hiring a law firm like Kirkland is not indicative of a bankruptcy filing, and many companies work with law firms to successfully refinance or restructure their debt without filing for protection. The company has already announced it is working with Lazard to help address its debt load, and it successfully refinanced some of its debt just a year ago. Still, it has become increasingly difficult for leveraged retailers to tap the refinancing market, as lenders have become spooked by the increasing number of retail bankruptcies.
Falling sales are the main culprit causing the financial issues at Toys R Us. And of course, the reason sales are falling are because of Walmart and Amazon.