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Toys 'R' Us filing Chapter 11 bankruptcy: What that means for your holidays and beyond

Posted: 6:00 AM, Oct 20, 2017
Updated: 2017-10-20 06:40:18-04

Toys 'R' Us recently surprised millions of parents by filing for Chapter 11 bankruptcy protection. So what does this mean for the upcoming holiday shopping season?

For many it's been a rite of the holiday season: shoppers rushing through the doors of Toys 'R' Us on Black Friday. But will the doors open this year following bankruptcy issues? The retailer says "yes" and that it’s reorganizing, not going out of business, despite some rumors.

It says all stores will be open this holiday season. Gift cards will be sold and honored. Return policies will not change. And layaway will be open once again.

Published reports, though, show some Toys 'R' Us suppliers are holding back shipments until they get paid. Shelves may be thinner than usual this year. Reuters says makers of fidget spinners, slime kits, and other novelty items are pausing on new stock.

Toys 'R' Us is making an effort to improve its store experience. In all of its 1,600 stores, it will offer an augmented reality app. When you walk around the store there will be cartoon characters that come to life.

Will it be enough to offset the conveniences of shopping at home and avoiding busy, stores with long lines? Entrepreneur magazine doesn't think so. Just this week it published an article entitled "Why a Turnaround at Toys 'R' Us Will Tank." It cites how the chain has lost its brand story, how its strategy is still misaligned, and upgrading its systems is too little and too late.

So, if you get a gift card, make sure you use it sooner than later.