Toymakers tumble as Toys 'R' Us prepares to liquidate

  • Toymakers tumble as Toys 'R' Us prepares to liquidate

Toymakers tumble as Toys 'R' Us prepares to liquidate

Shares of Mattel Inc (MAT.O) and Hasbro Inc (HAS.O), the two largest USA toymakers, tumbled on Friday after reports that key customer Toys "R" Us Inc is preparing for potential liquidation, six months after filing for bankruptcy.

Bankrupt toy seller Toys "R" Us could liquidate all of its United States stores as early as next week, according to reports. If Toys "R" Us does end up liquidating most of it's USA operations though, that will have a much more significant impact on every toys company, not just Mattel and Hasbro (via Reuters). The toy business was large enough that he was able to compete with department stores that had toy sections.

2018 - Sources expect the company to file for Chapter 7 bankruptcy liquidation next week.

If the event of a liquidation, "Toys R Us is not going to want to drag this out", Lopez-Castro said.

The company was founded in 1948 when Charles Lazarus opened Children's Bargain Town, a baby-furniture store.

The toy chain's USA division entered bankruptcy in September a year ago, planning to emerge with a leaner business model and more manageable debt.

The retailer hasn't found a buyer or made a debt restructuring deal with its lenders.

Toys "R" Us generated US$11.5 billion in sales in 2016. This includes Mattel, Inc.'s (NASDAQ:MAT) stock dropping by 6% and Hasbro, Inc.

Toys R Us had, through its marketing team and CEO, been quite vocal in the initial weeks and months following its bankruptcy filing in September.

If Toys "R" Us is unable to fashion a last-minute miracle, the end of its 70-year run would be the latest blow to the reeling retail industry.

Reports that Toys "R" Us could close all of its more than 800 stores as early as next week had a big impact on toymaker stocks on Thursday.