Despite turnaround efforts at Toys R Us, which included adding more hands-on "play labs", retail experts say the 60-year-old company has been unable to get customers back into its stores.
Every UK branch of Toys R Us is set to close in six weeks after talks to rescue the company failed.
Last month, Toys R Us began going-out-of-business sales at roughly 170 USA stores, and said it could close other stores as part of its restructuring.
Toys "R" Us is expected to close hundreds of stores worldwide as well. Toys "R" Us employs 3,200 people at 100 stores in Britain.
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The company's CEO, David Brandon, notified employees earlier in the day, according to an earlier report by The Wall Street Journal. FAO Schwarz, which Toys R Us once owned, is opening shops inside department stores in the USA and China.
Without Toys R Us, Wissink estimates that 85 percent to 90 percent of the shopping that would normally happen at the toy chain would shift to other retailers. The company, which is owned by the private equity firms Bain Capital and Kohlberg Kravis Roberts, has been hampered by the debt load it was saddled with by the real estate firm Vornado Realty Trust, which bought Toys "R" Us in 2005. "It's sad", she said about the decline of Toys R Us.
Traditional "bricks and mortar" retailers have been struggling to compete with online offerings.
"If there is no Toys "R" Us, I don't think there is a toy business", Larian said in an interview. Receiving debtor-in-possession financing and bankruptcy protection, Brandon said, would "ensure the iconic Toys R Us brand stays viable for years to come".
The company didn't do enough to emphasize that it was reorganizing but not going out of business, Silver said.