Hard times for Toys R Us, an American company among the world leaders in the production and sale of toys. The New Jersey company risks bankruptcy due to debts of over 5 billion dollars. At the moment, the over 11 billion in consolidated turnover that Toys R Us develops all over the world is not enough.
The crisis, which began in 2014, is mainly due to the growth in the level of competition in the sector. Large non-specialist retailers such as Walmart e Target they started selling toys in their own shopping malls and, concurrently, online sites such as Amazon.com have gained large market shares.
The company operates 875 stores in the United States, more than 600 internationally, and more than 140 franchised stores in thirty-five different countries. To try to improve the financial situation, the company had even gone so far as to close, in 2015, the famous sales point of Times Square
With the arrival of the Christmas holidays, Toys R Us aims to increase the volume of sales so as to find resources to cover the debt. Among the alternatives that are being examined these days, there is also the possibility of obtaining additional financing.
In the 2016 financial statements, shareholders' equity was negative by more than one billion dollars. The result seems to be the overall effect of the losses that, starting from 2014, the company records annually. Just 2014 was the worst year for Toys R Us.
The last quarterly 2017 confirmed the criticality of the situation: losses of 160 million on revenues of 2,2 billion. Suffice it to say that in a year the group spends more than 400 million dollars – interest alone – on the five billion debts accumulated over time.
So it's not a sales problem. The toy giant founded in 1948 can count on a strong reputation and a product range that satisfies many age groups. Everything revolves around the debt situation, which is difficult, but not impossible, to restore.
