Toy retailer Toys "R" Us is reportedly putting together a loan to shoulder its operating expenses in an imminent bankruptcy filing. The filing might come before the holiday sales season.
The Wall Street Journal first reported on Friday that Toys "R" Us has been working on its move to file for Chapter 11 protection in US Bankruptcy Court in Richmond, Virginia.
The company's move has proven that retailers, either big or small, are facing the distress brought by online shopping platforms like Amazon.com and discount stores like Wal-Mart Stores Inc. Several closures had taken place earlier this year. However, Toys "R" Us is considered to be the biggest retailer to take the bullet so far.
CNBC reported on Saturday that the company is now wedged with approximately US$5bn in debt. Toys "R" Us currently has more than 1,600 branches across the globe.
Sources said "several hundred million dollars" to be loaned would secure the company's suppliers of merchandise. In previous months, Toys "R" Us had noted that a negotiation with an investment bank is underway to see what they can do with the US$400 million in obligation due in 2018.