Toys R Us Will Sell Or Close Remaining Illinois Stores

Toys R Us, which announced it was closing seven locations in Illinois, now is preparing to possibly sell off or close all of its U.S. locations — a move that could jeopardize the jobs of 33,000 people, according to multiple reports published on Wednesday. The company filed a motion seeking approval from a bankruptcy court approval to begin "an orderly wind-down" of its U.S. operation and liquidate inventory in its 735 stores.

The motion also included bidding procedures for the retailer's Canadian operations, according to a statement by the company. Toys R Us is currently talking with other parties to combine up to 200 of its top performing U.S. stores with its Canadian operations, the company said.

"I am very disappointed with the result, but we no longer have the financial support to continue the Company's U.S. operations," Chief Executive Dave Brandon said in statement.

The company confirmed the reports that Brandon had shared the despairing news with employees in a conference call, according to The Record. Brandon told employees it was a sad day and that customers and others would be sad to see the brand disappear, a spokeswoman for Toys R Us told The Record.

A CNBC report, however, provided a slightly different take on the matter.

Toys R Us is studying one proposal that could keep the business alive and keep open roughly 200 U.S. stores open after the retailer liquidates, according to the CNBC report on Wednesday.

The Record also reported that the decision to liquidate the company may not mean the end of the toy retailer if a buyer surfaces who wants to purchase some of the stores and operate them as an ongoing, smaller version of the business.

RELATED: Toys R Us Closing 7 Illinois Stores

Last week, Bloomberg reported that although a final decision has yet to be made, the bankrupt company appears increasingly likely to liquidate its assets after failing to restructure its debt with lenders or find a buyer.

The Wall Street Journal said people close to the matter revealed the possibility of U.S. closures developed after a weak holiday season.

"The plan to shut down the stores and liquidate the U.S. operations is one of several scenarios in play, one of the people said, and while some lenders are pushing that route, others want to find other options for Toys 'R' Us to continue operations," according to this report in the WSJ.

News of the possible closures first broke Thursday, and while Toys R Us declined to comment on the issue, they did thank their customers via a message on Twitter on Friday.

"To our loyal customers: We've seen an amazing outpouring of love and support in recent days and we truly appreciate it," the company said on Twitter. "Our stores are open for business, ready to bring joy to children wherever we can, and to help new and expecting parents navigate raising a family."

The company began the year with more than 800 stores across the country under the Toys R Us and Babies R us monikers. In January, Toys R Us said it would close 182 locations — about 20 percent of its stores — including seven outlets in Illinois.

The demise of Toys R Us would be a significant blow to the toy industry as the chain makes up about 15 percent of American toy revenue.

The New Jersey-based Toys R Us filed for bankruptcy in September amid slumping sales and mounting debt, which grew to about $5 billion. The once-popular chain faced increasing competition from Amazon, Walmart and Target. The chain was initially set to close about 180 of its stores, or about 20 percent.

Patch editors Kara Seymour, Tom Davis, Eric Heyl and Mike Carraggi contributed to this report.

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