Reports: Game over for Toys R Us

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A customer exits from a Toys R Us store in Louisville, Kentucky, on Sept. 18, 2017.

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A customer exits from a Toys R Us store in Louisville, Kentucky, on Sept. 18, 2017.

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Toys R Us is preparing to close all its stores in a total liquidation, according to multiple reports, with the iconic retailer having spent the past several months attempting to find a path to survival through a Chapter 11 bankruptcy proceeding.

Bloomberg and the Wall Street Journal cited multiple unnamed sources who blamed the development on weak holiday sales that in turn ratcheted up pressure from lenders owed $5 billion. A formal announcement could come as soon as Monday, with the company still holding out hope for a midnight rescue offer.

A Toys R Us closure would have immediate ramifications for workers at the stores, which double as outlets for its Babies R Us brand — in regulatory disclosures for previous store closings nationally, Toys R Us has listed between 50 and 80 workers in each location.

But the company’s vendors who extended merchandise or credit on the promise of payment stand to lose, as well, including Lego, which has its U.S. headquarters in Enfield. Other Toys R Us and Babies R Us suppliers with local ties include Wilton-based Melissa & Doug; Compass Diversified Holdings in Westport, which owns the Ergobaby line of infant carriers; Jakks Pacific, which sells action figures under license with Stamford-based WWE; and Newell Brands, which has a corporate office in Norwalk and its umbrella of brands including Graco and Baby Jogger.

“It’s really incumbent upon (companies) like us to make sure that, as those stores come out, that we’re actively marketing to the consumer and trying to drive her to an alternative location where she can find our products in the price tier that she’s shopping in,” said Michael Polk, CEO of Newell Brands, speaking to investment analysts in mid-February. “That’s a little bit of the ‘inside baseball’ type of details that are going on in the baby business right now.”

Also exposed in any liquidation are landlords, with Toys R Us having pressed for better rent terms the past several months.

Wayne, N.J.-based Toys R Us was already in the process of closing two Connecticut stores in Newington and North Haven, while intending to push ahead with southwestern Connecticut locations in Danbury, Norwalk and Milford; as well as in Waterbury and Manchester after reversing prior plans to close the two.

In Norwalk, city planners were already eyeing the future of a Toys R Us store at the base of Connecticut Avenue, a prominent location overlooking Interstate 95 and the SoNo Collection luxury mall under construction. Connecticut Avenue has drawn ample interest from retailers the past few years, with new locations for REI, Lowe’s and Wine and Beyond among others.

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The Toys R Us sites in Danbury and Milford are similarly prominent, anchoring the Danbury Square plaza operated by Greenwich-based Urstadt Biddle Properties adjacent to Danbury Fair mall just off I-84; and in Milford, located at 330 Old Gate Lane across I-95 from the Connecticut Post mall.