Toys R Us Canada Files for Creditor Protection

Toys R Us Canada Ltd. has filed for creditor protection as it grapples with mounting financial pressures, including inflation, rising labor costs, supply chain issues and a consumer shift toward online shopping. The filing, detailed in court documents, aims to allow the toy retailer to restructure its operations while keeping its remaining 22 stores open for now.

The company, owned by Ancaster, Ontario-based Putman Investments since its 2021 acquisition from Fairfax Financial Holdings Ltd., stated that recent efforts to stabilize the business fell short. Those measures included staff layoffs, closing unprofitable locations and renegotiating with suppliers. Toys R Us Canada now reports owing at least $120 million to vendors and substantial sums to landlords. It operated 81 stores at the time of the Putman purchase, but the number has dwindled amid ongoing challenges.

Store closures have accelerated in recent months, with the latest involving a location at Toronto's Lawrence Allen Centre. Landlord RioCan Holdings Inc. filed a lawsuit claiming the retailer failed to pay January rent of about $43,000, leading to lease termination on January 20 after a seven-day warning. RioCan is...