Is Toys “R” Us in Trouble?
Bankruptcy may be in the near future for Toys "R" Us. What does that mean for the company?
According to CBS News, Toys "R" Us owes nearly $450-million by the end of the fiscal year. As of last April, Toys "R" Us had more than $5 billion in long-term debt.
"They've been extending the debt as it comes due and paying higher interest rates," investment banker Howard Davidowitz tells CBS, adding that such a strategy isn't sustainable. "They have got enormous debt."
So what's happening? Competition is stiff with many people buying online with Amazon, or purchasing more at places like Walmart and Target. Reportedly, Toys "R" Us has spent about $100 million over the past few years to improve its e-commerce business.
They have hired a law firm to help them through this, but "what the future holds for Toys "R" Us isn't clear." -CBS News.