Toys "R" Us To File Bankruptcy Any Minute; Bonds Crash

Tyler Durden's picture

Over the weekend, we reported that vendors to iconic toy retailer Toys "R" Us had halted shipments over payment concerns and/or getting their receivables crammed down alongside other unsecured claims ahead of what appeared to be an imminent bankruptcy. Well, they were right, and according to Bloomberg a Chapter 11 filing by Toys "R" Us is to be expected as soon as tonight.

The latest Amazon casualty, Toys "R" Us bankruptcy filing would send America’s largest toy chain to bankruptcy court, dealing another blow to a brick-and-mortar industry that’s already reeling from store closures and sluggish mall traffic and conclude the saga of one of the last pre-crisis LBOs in which Bain Capital, KKR and Vornado Realty Trust saddled up the company with $7.5 bilion in debt.

According to Bloomberg, the retailer has already hired a claims agent meant to help administer a Chapter 11 process. What is unclear is whether the company will have sufficient liquidity to assure its vendors who have imposed an effective COD blockade on the company, to provide it with much needed holiday season merchandise. And speaking of Toys "R" Us vendors, as speculation of a bankruptcy mounted over the weekend, their shares tumbled: Mattel, the maker of Barbie and Fisher-Price, fell 6.2% while Hasbro, which makes Monopoly, Nerf and Transformers, dropped 1.7%, its biggest decrease in almost two weeks.

Predictably, as we showed on Saturday, Toys CDS has exploded as the cost of insuring the company against default surged, with prices of six-month and one-year CDS hitting record highs.

Finally, the most amusing chart is that of Toys "R" Us bonds which crashed some more on the Bloomberg report, and which were happily trading at par until just a few weeks ago, only to be shocked by the recent news report that the company had hired bankruptcy advisors, crushing all hopes that the company's maturing debt would be rolled over, as even its PE sponsors decided they had had enough.

Once the filing hits the docket officially, we look forward to updating the full list of 2017 YTD retail bankruptcies which one can probably also call "Exhibit A" in any Amazon anti-trust hearing. 

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Ben A Drill's picture

Is this the first or second time?

Number 9's picture

wtf? no one wants the barbie narc doll any more?

WillyGroper's picture

total KKR.

Bain'd of their existence.

F5 vornado.

spastic_colon's picture

i didnt know they still non event

Panic Mode's picture

This news is proudly sponsored by Amazon.

Haus-Targaryen's picture

Amazingly enough, Amazon still cannot turn a profit. 

jmack's picture

  They can, they chose not to, a significant difference.

bobbbny's picture

Bain Capital again.

Remember Romney, the job creator?



junction's picture

Bain Capital, KKR and Vornado Realty Trust.  You can't find better Wall Street thieves anywhere.  Bain even cheated the FDIC out of $10 million, thanks to Romney's help.

totenkopf88's picture

Mormons are real some cutthroat cocksuckers but wrap it up in their Holier-Than-Thou BS

yogibear's picture

Stores that serve as Amazon's showroom don't last long, especially if their not making any money.

Oliver Klozoff's picture

New record for the dow tomorrow!

Takemine2go's picture

Is this part of slowing the Chinese imports trump was talking about? 

This is it's picture

I don't want to grow up!!! 

Green2Delta's picture

I remember when the first one opened in Indianapolis. I got to meet Dick Butkus and Bubba Smith at the grand opening. With that unimportant shit being said; I'm surprised they lasted this long. 

If they do a discount sale the resellers are going to clean up. And they'll probably use Amazon to do it. Which adds some irony to the situation. 

not dead yet's picture

Toys-R-Us was a dead man walking long before Amazon became a force. Lazy journalists blame Amazon for killing companies that killed themselves.

Number 9's picture

brick and mortar in the earthquake economy..

Cautiously Pessimistic's picture

Well, this looks like a good night / good day (depending on where you sit) to dump some serious gold contracts on the market with no regard for profit at all.  

So it is written, So shall it be done.

Robert Trip's picture

Not to worry.

The toy stores will be replaced with "Roys R Rus" a Chinese outfit.

fowlerja's picture

Or maybe Sex Dolls & Toys 4 Us 

Flash44's picture

Or Rentabate a Chinese subsidiary of Chinese sex dolls. 

FredGSanford.'s picture

I am 54 years old. I have been to Toys-r-us 7 times in my life. Not any in the last several years. Wal Mart is where I buy dart boards and basketball and floats and tennis racquet and playing cards. I had forgotten that they existed till this article came up. Not sure why anyone would go in there.

Hongcha's picture

Only toys I buy are rifled - and no I don't mean Chinko inflatable dolls :)

Bad Attitude's picture

No Glocks?

Forward (over the cliff)!

Tachyon5321's picture

My son purchased a Playstation Pro from Walmart because Toys are U was $35 more... When everything is the same,  the low price wins.



Number 9's picture

tell you son to sell that fvkin thing, get a life and go fishing ffs

Robert Trip's picture

Hopefully your son will lose interest in his video games and take up a musical instrument instead or sell cigarettes on a street corner.

Both are more conducive to a well-rounded life.

mototard's picture

More evidence that folks have just run out of money and are cuttng back on everything.  "Everything" in this case includes over priced plastic electronic junk toys.

gregga777's picture

Mittens the Pussy Kitten Romney and his Bain CONporate Rape & Plunder operation killed Toys 'R Us amongst a number of other companies. And it qualified him to be the Repussican Presidential nominee in 2012 just like Carly Fiorina's plundering of H-P qualified her to be a 2016 Repussican Presidential candidate. They should go fuck each other and die horribly painful, slow gruesome deaths.

just the tip's picture

glad to see someone else pick up on that bain capital issue.  no one did when this was first posted this weekend.


i can't see a comment referencing iCarly without seeing her falling off the stage after she introduced ted cruz, and cruz and family just walking right in.

DoctorFix's picture

Are you kidding!  That's the first thing that popped out at me when I read it.   Mittens fucking a toy company over is a strangely prophetic vision of what he and his ilk do to all of us.

Robert Trip's picture

Booze, dope  bills and food.

Ain't got no money for a wind up teddy bear or some weird toy animal farm at 5 bucks an animal.

Number 9's picture

you left out pussy..the gash gets more expensive daily..

Panic Mode's picture

More space for coffee shops, hair stylers, charity shops and marijuana shops.

itstippy's picture

Facial spas, nail emporiums, tattoo parlors, tanning salons, fern bars, check cashing outfits, discount liquor stores,  . . .

There are lots of retail entrepreneurs waiting to make their move in this vibrant economy.

CRM114's picture

You missed out guns and pawn.

The Big Three are Guns, Nails, Pawn. Take the safest possible route out of any neighborhood with all three in one mall.

I came to this conclusion after a Trans America drive.

Other conclusions:

If you want half-decent food, find a restaurant with mostly European cars outside.

Any chain hotel with a room price under $90 will have other customers you don't want to meet. 

Choose routes which avoid tolls and the highway patrol. Exception: I-95 is unavoidable as there is often no sensible alternative.

Refuel in daytime. Keep topped up.



Robert Trip's picture

Excellent advice.

Thank you Rambo.

CRM114's picture

I don't get the connection to Rambo.

Avoiding the highway patrol is for unreasonable fines risk, nothing else.

On that long drive, I do specifically recall stating to my partner that we wouldn't be stopping for gas in West Virginia. She laughed, reckoned I was paranoid. On the TV that evening, the lead story was another sniper at a West Virginia gas station. She went totally white, and I haven't had her laugh at me since.

CRM114's picture

Don't know anyone who has switched to buying toys off the internet. They just aren't buying toys any more. Kids seem to want electronic stuff for indoors, and outdoor games. Toys 'R' don't have any of that. I buy regularly for 7 kids, ages 4 to 16, and I've been in Toys 'R' twice in 5 years.

Oh, and I don't think there's as much cash around these days...


just the tip's picture

7 kids, ages 4 to 16,

holy fuck.  you need a reality show.

either that or, you are a reality show.

back in the '60s you would be a movie.

set up a webcam in your living room and broadcast live.

CRM114's picture

I didn't say they are my kids; but nephews, nieces, etc.

 Although I do know 2 families with 7 kids each. Three of the four parents are doctors.


Stan Smith's picture

+1 and many more -- THIS.

Kids either play video games, or the exact opposite -- go outside and go nuts running around or playing sports.    There's little in between with my kids anyway.   Thankfully, most of it is outside time.

buzzsaw99's picture

i'm sure the private owners got plenty i'm just glad they didn't have a chance to dump the carcass off on some poor pension fund.

Robert Trip's picture

Peep Shows and massage parlors could be  profitable viable options for these retail locations.

And maybe throw a topless bar into the mix.

You may have a winner on your hands.

thepigman's picture

Potterville!!!!!.....COMING SOON!!!!

Stormtrooper's picture

No.  First stop is a tatoo parlor.  Final stop before the bulldozer is a church.

Robert Trip's picture

Walking into Toys "R' Us was similar to walking into a dollar store where the fumes from formaldehyde and cheap plastics wafted through the stagnant air to the sounds of toddlers acting up and the high pitched screeches from the women welfare bums.

Not a pleasant enviroment.

Give me a bar with some good drafts on tap any day.