The US-based Toys R Us, as part of the restructuring of its business, is winding up 180 odd stores, according to CNBC report. According to the report, the closures had commenced in February and might as well run through mid-April. Apparently, the move is to emerge from bankruptcy, noted the report.RestructuringIn other words, Toys R Us will hive off one-fifth of its US store fleet in an apparent bid to restructure the company and emerge from bankruptcy protection. The closures still need court approval, documents show, but management is planning to shut the locations starting in early February and running through mid-April.Tough Decisions"The reinvention of our brands requires that we make tough decisions about our priorities and focus," Chairman and Chief Executive Officer David Brandon wrote in a memo to customers. "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."The Wayne, New Jersey-based retailer added that a number of its existing locations will be co-branded as Toys R Us and Babies R Us stores, according to the report.Bankruptcy FilingI may be recalled that just four months ago and before the holiday shopping season, Toys R Us filed for bankruptcy protection due to falling sales and increasing debt. The toy chain faces fierce competition from firms such as Amazon, Walmart, and Target. What’s more, the company had struggled meeting consumers' needs online.
Cohesive FocusThe company is having a cohesive focus on improving the in-store and online shopping experience and is eventually planning to revamp its loyalty program to appeal to more consumers. Meanwhile, the president of Toys R Us Canada, Melanie Teed-Murch, said in a separate memo that the 83 locations in Canada won't be impacted. In Canada, Toys R Us "will be taking additional steps to improve the overall customer omnichannel experience with compelling promotions, continued improvements to mobile and digital marketing and enhancements to our baby registry and loyalty programs," Teed-Murch concurred.Furthermore, industry grapevines have already speculated that Target is positioned to be the biggest winner as Toys R Us closes some of its U.S. stores, considering the big-box retailer's proximity to the toy chain's locations.Out of Toys R Us' roughly 880 store fleet in the U.S., 183 stores (including those under the Babies R Us nameplate) have at least one other Toys R Us store within a 15-minute drive, UBS wrote in a note to clients in December. Analysts Arpine Kocharyan and Michael Lasser said they believed the company would close these "cannibalized" locations before any others, added the report.