Toys “R” Us Canada has sought relief from an Ontario court after shutting down 53 stores in the last two years and facing legal actions from unpaid suppliers and landlords. The toy retailer has filed for creditor protection as part of a restructuring effort to navigate its current challenges. These actions come as the company grapples with inflation, increased labor costs, supply chain disruptions, and the growing dominance of e-commerce in the market.
Despite implementing measures such as staff layoffs, store closures, supplier negotiations, and diversifying revenue streams in 2023 and 2024, Toys “R” Us Canada has struggled to stabilize its operations. The company now finds itself owing approximately $120 million to vendors and significant sums to landlords.
While the company’s 22 stores are currently operational, Toys “R” Us Canada has indicated the possibility of further reducing its store count. Options under consideration include liquidating stores, assets, and equipment, as well as initiating a sales process for the remaining locations with guidance from Alvarez & Marsal, an external monitor overseeing the creditor protection proceedings.
Owned by Putman Investments, Toys “R” Us Canada was acquired from Fairfax Financial Holdings in 2021. Putman Investments, based in Ancaster, Ontario, is associated with brands like HMV, Sunrise Records, FYE, Ricki’s, Cleo, and Northern Reflections. The company recently closed its T. Kettle stores during the holiday season and previously discontinued the Rooms + Spaces home goods venture.
Additionally, Everest Toys, a sister company founded by Doug Putman’s father, faced receivership last year. The situation reflects the broader challenges in the retail sector and the evolving landscape that companies like Toys “R” Us Canada are navigating to ensure their future viability.