America’s largest toy store chain has filed for bankruptcy protection, but its operations in Hong Kong are unaffected by the latest proceedings.
The filing is among the largest ever by a specialty retailer. But its Asian joint venture said the bankruptcy will not affect its business here.
In a statement, the company also said that its Canadian subsidiary is also seeking similar protection through a court. The company has almost US$5 billion in debt, and US$400 million of that comes due next year.
Its chairman and CEO Dave Brandon said he’s confident that the company has taken the right steps to ensure that its iconic brands live on for many generations. The move casts doubt over the future of the company’s approximately 1,600 stores and 64,000 employees.
But its 13 stores in Hong Kong will not be affected as its Asian joint venture is not part of the financial restructuring plan. Toys R Us owns 85 percent of the Asian arm and Fung Retailing, controlled by tycoon Victor Fung and his family, owns 15 percent.
The joint venture is a separate legal entity and is financially independent. It operates over 135 stores in the mainland and it says it will be opening another 22 in the coming weeks.