Brick & Mortar Meltdown: Toys R Us Hires Bankruptcy Law Firm

Brick & Mortar Meltdown: Toys R Us Hires Bankruptcy Law Firm: 

Brick-and-mortar retail meltdown strikes again – this time, Toys R Us. In what is a classic sign, the company has hired mega law firm Kirkland & Ellis, whose bankruptcy-and-restructuring practice is considered a leader in the now booming bankruptcy-and-restructuring industry.

Toys R Us, with 1,694 stores globally, has $5.2 billion in long-term debt, according to its latest quarterly report, and sports a negative equity of $1.3 billion. Quarterly sales declined 4.8% year-over-year, to $2.2 billion. This isn’t a one-quarter dip: sales are down 15% from the same quarter in 2012. And the net loss jumped 30% year-over-year to $164 million.

The company needs to restructure its debts, particularly $400 million that is coming due in 2018, and a bankruptcy filing is one of the options, “sources familiar with the situation” told CNBC on Wednesday.

H/t reader squodgy:

“Should have moved to online years ago.”

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