Struggling Toys 'R' Us retailer has filed for bankruptcy ahead of the busy holiday shopping season.

The New Jersey-based, big-box retailer says it will keep its stores open as it works with the courts to restructure its $5 billion in debt and make a plan for long-term growth, according to The Associated Press.

The company filed its paperwork with the U.S. Bankruptcy Court for the Eastern District of Virginia in Richmond.

Dave Brandon, the company's chairman and CEO, resigned as the University of Michigan's athletic director in 2014 after season that included the failed tenure of football coach Brady Hoke and controversy over ticket prices.

Before U-M hired Brandon in 2010, he had been the CEO of Domino's Pizza for 11 years.

Brandon said the bankruptcy filing will give Toys 'R' Us financial flexibility, according to the AP.

"The company's approximately 1,600 Toys 'R' Us and Babies 'R' Us stores around the world -- the vast majority of which are profitable -- are continuing to operate as usual," the company said in a statement. "Customers can also continue to shop for the toy and baby products they are looking for online."

Toys 'R' Us became a household name by the early 1990s, with its friendly giraffe mascot and its thick, pre-holiday toy catalogue.

But discount retailers like Walmart and Target - and later online shopping via Amazon - have taken away chunks of its customer base.

According to the AP, Toys 'R' Us has had debt issues since private-equity firms Bain Capital, KKR & Co. and Vornado Realty Trust took it private in 2005 in a $6.6 billion leveraged buyout.

Later plans to take the company public did not materialize.