Retailer Toys 'R' Us files for bankruptcy in the US

It says shops outside the US and Canada are not affected

Retailer Toys 'R' Us files for bankruptcy in the US

A logo sign outside of a Toys

The toy store chain Toys 'R' Us has filed for Chapter 11 bankruptcy in the US.

The firm says its operations outside the US and Canada are not included in the proceedings, which were filed in Virginia.

The firm's Canadian subsidiary is also to seek parallel protection in the Ontario Superior Court of Justice.

The company says it intends to use these court-supervised proceedings "to restructure its outstanding debt and establish a sustainable capital structure".

The company has some 1,600 stores around the world, including Ireland.

It says "the vast majority" of these are profitable and will continue to operate as usual.

Toys 'R' Us chairman and CEO Dave Brandon says: "Today marks the dawn of a new era at Toys 'R ' Us where we expect that the financial constraints that have held us back will be addressed in a lasting and effective way.

"Together with our investors, our objective is to work with our debtholders and other creditors to restructure the US$5bn of long-term debt on our balance sheet, which will provide us with greater financial flexibility to invest in our business, continue to improve the customer experience in our physical stores and online, and strengthen our competitive position in an increasingly challenging and rapidly changing retail marketplace worldwide."

The company says it has received a commitment for over US$3bn (€2.5bn) in debtor-in-possession financing from various lenders - including a JPMorgan-led bank syndicate.