NEW YORK (AP) - Toys R Us' management has told its employees that it will sell or close all of its U.S. stores, according to a toy industry analyst who spoke to several employees Wednesday.
Jim Silver, a New York-based long-time toy industry expert, said Toys R Us's CEO David Brandon told employees the company's plan is to liquidate all of its U.S. stores and after that, it could do a deal with its Canadian operation to run some of the U.S. stores.
The Wayne, New Jersey-based company, which has 30,000 U.S. employees, declined to comment.
The chain filed for Chapter 11 bankruptcy protection last fall, saddled with $5 billion in debt that hurt its attempts to compete as shoppers moved to Amazon and huge chains like Walmart.
It pledged then to stay open, but had weak sales during the critical holiday season as nervous customers shied away. In January it announced plans to close about 180 stores over the next couple of months.
Now, the $11 billion in sales still happening at Toys R Us each year will disperse to other retailers like Amazon and discounters, analysts said.
In filing for bankruptcy protection last fall, Toys R Us pledged to make its stores more interactive. It added demonstrators for the holiday season to show people how toys work, and began opening Play Labs at 42 stores, areas where children can play with different items.
Harold Chizick, whose public relations firm represents small toy companies, said once Toys R Us' operations are liquidated and the debt load goes away, the name could be revived.