On September 18, toy retail giant Toys R Us filed for voluntary Chapter 11 bankruptcy protection in the U.S. and Canada.
The bankruptcy filing is just the latest in a string of bankruptcies that are shaking up the retail world.
According to CNBC, Toys R Us has $4.9 billion in debt, $400 million of which has interest payments due in 2018 and $1.7 billion of which is due in 2019.
Although the toy store chain has struggled to compete with Amazon and stores like Walmart, its financial problems were exacerbated by a heavy debt load from buyouts by private equity firms and an investment trust.
In a ray of hope for Toys R Us, JPMorgan Chase and a group of other lenders have agreed to provide $3 billion in debtor-in-possession financing so it can continue paying suppliers and employees.
Restructuring its debt would give the toy store the financial flexibility it needs in order to improve its website, revamp its Babies R Us business, and other measures to help it continue its turnaround.
In the wake of the announcement, Toys R Us tweeted, “Our store and online operations are continuing as usual so you can continue to be a #ToysRUsKid.” Its Twitter announcement also indicated that the store chain is preparing for the holiday season.
“Today marks the dawn of a new era at Toys “R” Us where we expect that the financial constraints that have held us back will be addressed in a lasting and effective way,” Board Chairman and CEO Dave Brandon said in a release following the finding. “Our objective is to work with our debt holders and other creditors to restructure the $5 billion of long-term debt on our balance sheet, which will provide us with greater financial flexibility to invest in our business.”
The statement also said that the bankruptcy filing would help the company invest in long-term growth and “fuel its aspirations to bring play to kids everywhere and be a best friend to parents.”
Toys R Us’s stores in Europe, Asia, and Australia are not included in the bankruptcy filing.
The company told the BBC that the majority of its stores around the world remain profitable, and that it would continue to operate as normal in the U.S. through the holiday season. It is also looking to its recently launched online web store to help secure its future.
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