Following the recent bankruptcy of retailer Toys R US, an announcement has been made by the company that it’s planning to close up to 182 of its stores across the country. There are currently 1600 stores in the global chain, 880 of which are located in the US. The decision to close its stores will be unpopular with both staff and customers, however, lawyers representing the company claim the decision is essential to keep up with competition from online retailers.
The closures are still awaiting court approval which is expected to be finalised by the end of April this year. In a statement on their website, Toys R Us CEO Dave Brandon said “The actions we are taking are necessary to give us the best chance to emerge from our bankruptcy proceedings as a more viable and competitive company.” Stores outside the US are currently unaffected by the decision, and CEO of the Canadian branch of the company reassured consumers that all of its 83 stores will remain open for the foreseeable future.
The news of these closures is a concern for both Toys R Us and the retail industry in America as a whole. This year has been particularly difficult for retailers, with a total of close to 7000 stores closing across the country. This is a new record, and figures from the Fung Global Retail and Technology thinktank show that the total number of stores, even when taking into account new openings, has fallen for the first time since 2009.
Most experts agree that the struggle retailers are facing can be put down to the shift towards online shopping. Online retailers like Amazon and eBay are continuing to flourish and see booming profits, while traditional stores are struggling to keep up. More and more retailers are shifting towards online sales, and foot traffic in stores fell by 8% last year alone. The massive and increasing competition from companies like Walmart and Target in the US are also thought to be fueling the issue.