Toys R Us is said to miss vendor payments as woes mount

Toys R Us is said to miss vendor payments as woes mount

Toys R Us is said to miss vendor payments as woes mount

Toys "R" Us Inc. has missed payments to some suppliers in recent days as the USA division heads toward a likely liquidation, according to people with knowledge of the situation.

Toys R Us, like many big-box stores, just couldn't keep up with its competitors like WalMart and Amazon.

A source told CNBC that Toys R Us is in the process of drafting the court motion for its liquidation plan and the toy store has also not paid some of its vendors this week.

The chain had already announced the shutdown of a Babies "R" Us location in the Holyoke Mall.

The company filed for Chapter 11 protection in September, when it seemed it might be able to reorganize its debt while it renovated stores and operations, but those hopes are fading, according to reports in the Wall Street Journal and Bloomberg. "We heard initially they were closing some of the stores and now we're hearing they're closing all of the stores so sales are even higher", said Mary Mancini, of Downingtown.

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Earlier in 2018, the company announced it would close about 180 stores as part of its bankruptcy restructuring, which included Babies R Us stores.

The bleak situation lends evidence to the notion that Toys "R" Us is moving toward winding down its USA operations for good.

A survey of about 850 independent retailers by the firm Advocates for Independent Business found that small retailers believe their "smaller size and greater understanding of their local markets" makes them more nimble than chains like Toys R Us and better at responding to shifts in the retail industry.

The struggles of Toys R Us have taken a toll on the two largest USA toymakers, Hasbro and Mattel. Now Toys "R" Us and other category killers like the now-defunct Sports Authority, Borders and Circuit City, are being upended by online retailers.

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