Toys 'R' Us Inc, the largest U.S. toy store chain, has filed for bankruptcy protection. As David Pollard reports, it's the latest sign of turmoil in the retail industry that is caught in the grip of online shopping and discount chains.
For now they remain open, but 64,000 employees at sixteen hundred stores may wonder whether the 'exit' sign could - at some point - be for them. Toys R Us' bankruptcy filing is among the largest ever by a US specialist retailer. Though it does buy it time. One report says it's received a commitment for three billion dollars in emergency funding. The company itself says it'll now work to restructure five billion dollars of debt on its books. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "A perfect storm for Toys R Us ... Toys R Us have just been caught between that change in consumer trends and the existing debt burden. They've just found a business model that doesn't fit with 21st century consumer." Especially when discounter Walmart and online giant Amazon seem to have found models that do fit. Toys R Us caught in what's been described as a vise-like grip between the two. Its stores outside of the US and Canada aren't affected. But the value of bonds due to mature at home next year have lost half their value this month. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "Toys R Us have built up physical premises when increasing market share is being grabbed with those without shop frontage and don't have those costly overheads." More than a dozen US retail chains have filed for bankruptcy this year. Even Macy's and Sears have closed hundreds of locations as they struggle to compete. US retail - even for its largest toy store chain - anything but child's play.