Toys "R" Us is currently undergoing liquidation processes for its bankrupt U.S. operations. It currently lacks a buyer and has unsuccessfully sought a debt restructuring deal with lenders. Insiders are giving up hope of any buyer emerging, and are skeptical that lenders will ever agree on the terms of a debt restructuring. The company has not turned a profit since the 2013 fiscal year due to interest payments, in spite of figures like its $11.5 billion sum in 2016 sales.

The U.S. division officially declared bankruptcy in September, but hoped to bounce back with a leaner business model and less debt. But a $3.1 billion loan to keep stores open only pushed the company lower.

The company's fate is yet another milestone in the death of retail due to e-commerce and diminishing apparel budgets. Toys "R' Us's global business is faring no better.

The bad news caused stocks of Mattel Inc. (MAT  ) and Hasbro Inc. (HAS  ) to fall in early March. These are Toys "R" Us's "biggest unsecured creditors". Mattel is owed over $135 million, and Hasbro is owed $59 million. Toys "R" Us's $583 million of first-lien bonds (i.e. the highest priority debt that can be issued, which must be paid first in case of default) due in 2021, declined by four cents, to 83.9. This marks its largest decline since September, when the company filed for bankruptcy.

In 2005, Toys "R" Us was subject to a $7.5 billion leveraged buyout, where Bain Capital, KKR & Co. (KKR  ) and Vornado Realty Trust (VNO  ) "loaded" the company with debt. This enabled the company to refinance its debt and postpone its ultimate date of declaring bankruptcy. Amazon.com's (AMZN  ) increasing strength may have hurt Toys "R" Us. Interest payments also hindered its ability to use its limited funds towards improving operations and technology. Rumors of impending bankruptcy caused Toys "R" Us's vendors to keep a distance. Roughly 40% of them ended shipments, forcing the company to seek court protection. This forced Toys "R" Us into bankruptcy, but without the benefit of a plan for restructuring its debt, making it even harder to find an exit route.

Currently, Toys "R" Us makes up 15% of the American toy revenue. The now-nearly-defunct retailer was once happy to take risks on less-well known products and smaller companies. Larger competitors like Walmart Inc. (WMT  ) and Target Corp. (TGT  ) took a much more cautious approach, and are still in business today.

Another difficulty stems from the fact that most kids nowadays either have scheduled-in activities, or play with electronics. Toys "R" Us has not transitioned well into the digital age. The company also relies heavily on seasonal sales, with holiday seasons comprising 75% of its sales. This is an additional obstacle to smoothly handling changes in consumer demand and preferences.

At the beginning of 2018, Toys "R" Us had over 800 stores. But it shortly announced the closing of 180 locations nationwide. As a result of Toys "R" Us's bankruptcy, 85 to 90% of toy shopping will shift to other retailers. The company wishes to peruse a deal that may sell its Canadian business and 200 of the most successful U.S. stores to a buyer, as this grouping represents those units that have enjoyed comparative success.