(RNN) – Generations of Toys R Us kids didn’t want to grow up, as the toy store chain’s jingle went.
But they always did. And eventually a generation came of age in a world where you didn’t need to go to a store to buy toys.
Now, the iconic retailer is all but certain to close up shop.
Multiple outlets reported on Wednesday the company has told its 33,000 employees it will sell or close all of its U.S. stores. That includes Babies R Us-branded locations.
A spokeswoman told The Record of Bergen County, in New Jersey, that CEO Dave Brandon told employees it was a “sad day.”
The company filed for bankruptcy six months ago. It had long been in financial trouble.
A private equity consortium led by KKR Group and including Bain Capital made a leveraged purchase of Toys R Us in 2005, and the company struggled under the debt used for the buyout. According to The Record the company's debt payments were as high as $400 million a year, and were particularly crushing when the recession hit in 2008.
On top of that, the retailer struggled to match competitors such as Amazon, who became significant players in the toy market as more and more sales moved online. In 2017 Amazon accounted for more than twice as much online revenue as Toys R Us in toys, earning $2.1 billion in sales to Toys R Us' $912 million.
Toys R Us actually partnered with Amazon at the beginning of the digital age. A deal that allowed them to sell their toys through Amazon fell apart with a lawsuit that Amazon eventually paid $51 million to settle. Toys R Us got to terminate the deal and set up its own online operation, but it never caught back up.
Toys R Us has been in business for 70 years. The company still operates around 800 Toys R Us and Babies R Us stores nationwide.
The company also announced on Wednesday it was closing its U.K. operation.
The Washington Post reported a group of toy-making companies, to whom Toys R Us reportedly owed millions, will attempt to salvage some of the retailer. Led by MGA Entertainment, the consortium submitted a bid for the company's Canadian operation, and will explore buying something like 400 U.S. stores.
The CEO of MGA, Isaac Larian, told The Post: "There is no toy business without Toys R Us."
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