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Toys R Us plans to close up to 182 stores including 4 on LI

Shoppers walk into a Toys R Us store

Shoppers walk into a Toys R Us store in San Antonio on Sept. 19, 2017. Credit: AP

Toys R Us Inc. said in a court filing late Tuesday that it would close up to 182 of its stores nationwide, including four on Long Island.

The company’s Babies R Us stores in Massapequa, Bohemia and Westbury are expected to close, as is the Toys R Us/Babies R Us in Commack.

The stores are scheduled to shut down by mid-April, Dave Brandon, the company’s chief executive, said in a letter on the company’s website.

About one-fifth of Toys R Us stores nationwide would close if the Wayne, New Jersey-based toy retailer’s plan is approved by a bankruptcy court.

The number of employees varies by store — and the court needs to sign off on the final list of stores — but there is an average of about 25 full- and part-time employees working at each location, a Toys R Us spokesman said Wednesday.

There are plans in place to support affected employees during the transition, he said.

Some would be relocated to other stores. Employees who could not be moved to other stores would receive severance packages.

Pending court approval, closing sales will start in February, the Toys R Us spokesman said.

Toys R Us once dominated toy sales in the United States. But hobbled by $5 billion in debt, and hurt by competition from online retailers such as Amazon, the company filed for bankruptcy protection in Richmond, Virginia, in September.

Toys R Us has struggled with debt since private-equity firms Bain Capital, KKR & Co. and Vornado Realty Trust took it private in a $6.6 billion leveraged buyout in 2005.

“They needed to do something like this for a while because they’ve been hamstrung by their debt service,” said Steve Pasierb, chief executive officer of The Toy Association, a Manhattan-based trade group whose members include Toys R Us.

The association is acting as a clearinghouse for information on Toys R Us’ bankruptcy filing for its members — including Hasbro, Mattel and Lego — many of which are creditors in the bankruptcy filing.

Toys R Us stressed that its changes are about moving the company forward.

“This is about the reinvention of our brands and business, and the continuation of our restructuring process, which started last fall,” the spokesman said.

Toys R Us Inc. will still have a presence on Long Island, including stores in Bay Shore, Carle Place, Deer Park, Lake Grove, Oceanside, Riverhead, Shirley and Valley Stream.

At some locations the retailer is combining its Toys R Us and Babies R Us stores.

The entire toy industry is restructuring due to competition from Amazon and other online retailers, which have lower costs for labor, rent and utilities and can pass those savings on to customers, said Jonathan DeCarlo, an analyst for IBISWorld Inc., a New York-based market research firm.

Also, third-party vendors can sell the same toys on Amazon’s and Walmart’s websites, increasing the chances that the products will be available, while Toys R Us might run out of stock online, he said.

“It’s almost like a mutually beneficial relationship. . . . They can increase their reach, their customer base, but it’s also good for Amazon because they can increase their product offering,” DeCarlo said.

Toys R Us closed its flagship store in Manhattan’s Times Square, a tourist destination, about two years ago.

Toys R Us is one of many retailers that sought bankruptcy protection last year, with consumers shifting where they shop and what they buy. Others include Payless Shoe Source, Gymboree Corp. and True Religion jeans.

Sears, Bob’s Stores and J.C. Penney are among the chains that have closed stores on Long Island in the last year.

TOP TOY RETAILERS BY MARKET SHARE IN 2016

Walmart Stores Inc. — 29.4 percent

Amazon.com Inc. — 16.3 percent

GameStop Corp. — 13.9 percent

Toys R Us Inc. — 13.6 percent

Others — 26.8 percent

Source: IBISWorld Inc.

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