What Happened to Toys R Us Bankruptcy and Comeback?
Toys R Us, once a dominant toy retailer, filed for Chapter 11 bankruptcy in September 2017 due to a heavy debt load from a 2005 leveraged buyout and intense competition from big-box stores and e-commerce. After liquidating all its U.S. stores by mid-2018, the brand has since embarked on a significant comeback under new ownership, re-establishing a physical presence through partnerships with Macy's and opening new standalone flagship stores globally, with continued expansion planned for 2026.
Quick Answer
Toys R Us filed for Chapter 11 bankruptcy in 2017, leading to the liquidation of all its U.S. stores by June 2018. The brand was later acquired by Tru Kids Brands in 2019, and then by WHP Global in 2021, which initiated a major revival. As of early 2026, Toys R Us has successfully re-established a significant presence with over 400 shop-in-shops inside Macy's stores, several new standalone flagship locations, and an expanding global footprint of 1,664 stores across 35 countries.
📊Key Facts
📅Complete Timeline15 events
Leveraged Buyout
A consortium of Bain Capital Partners, Kohlberg Kravis Roberts (KKR), and Vornado Realty Trust acquired Toys R Us in a $6.6 billion leveraged buyout, burdening the company with significant debt.
Files for Chapter 11 Bankruptcy
Toys R Us, Inc. filed for Chapter 11 bankruptcy protection in the U.S. and Canada, citing $5 billion in long-term debt and a need to restructure.
Approval to Liquidate U.S. Stores
The bankruptcy court approved Toys R Us's request to liquidate all its U.S. stores after failing to find a buyer or viable reorganization plan.
Liquidation Sales Begin
Going-out-of-business sales commenced at Toys R Us and Babies R Us locations across the United States.
All U.S. Stores Permanently Closed
Toys R Us permanently closed all of its remaining U.S. locations, ending 70 years of operations in the country.
Tru Kids Brands Formed
The global Toys R Us intellectual property (excluding Canada) was transferred to Tru Kids, Inc., formed by former Toys R Us executives, to revive the brand.
First Reimagined U.S. Stores Open
Tru Kids opened its first two experimental standalone Toys R Us stores in Paramus, New Jersey, and Houston, Texas.
Last Tru Kids Stores Close
The two experimental Toys R Us stores opened by Tru Kids in 2019 closed due to financial losses and low mall traffic, particularly impacted by the COVID-19 pandemic.
WHP Global Acquires Controlling Stake
Brand management firm WHP Global acquired a controlling interest in Tru Kids, signaling a new phase for the brand's revival.
400+ Macy's Shop-in-Shops Completed
Toys R Us completed the rollout of over 400 shop-in-shops within Macy's department stores across the United States.
First Store in Mexico Opens
Toys R Us opened its first store in Mexico in partnership with Liverpool, marking its entry into Latin America.
Partnership with NEXCOM for Military Families
Toys R Us expanded its reach by partnering with the Navy Exchange Service Command (NEXCOM) to open shop-in-shops on U.S. Navy and military bases.
Announces Major U.S. Store Expansion
Toys R Us announced plans to open 10 new flagship stores and 20 seasonal holiday shops in the U.S. by the end of 2025, in partnership with Go! Retail Group.
First New Flagship Store Opens in Aurora, IL
The first of the newly announced flagship stores opened at Chicago Premium Outlets in Aurora, Illinois, featuring an arcade experience.
Global Footprint Reaches 1,664 Stores
Toys R Us reported a global footprint of 1,664 stores across 35 countries, with 2025 being its largest international expansion year.
🔍Deep Dive Analysis
Toys R Us, an iconic toy retailer founded in 1948, faced mounting challenges that culminated in its Chapter 11 bankruptcy filing on September 18, 2017. The primary catalyst for its downfall was a crushing debt load of approximately $5 billion, stemming from a $6.6 billion leveraged buyout by private-equity firms Bain Capital, KKR & Co., and Vornado Realty Trust in 2005. This debt required annual payments of $400 million, severely limiting the company's ability to invest in store improvements, e-commerce, and competitive pricing strategies.
Compounding its financial woes was intense price competition from mass retailers like Walmart, Amazon, and Target, which often used toys as loss leaders to attract customers. Toys R Us also struggled to adapt to the rapid shift towards online shopping and failed to innovate its in-store experience, leaving its physical locations feeling outdated and less appealing to modern consumers. By March 2018, unable to secure a viable reorganization plan, Toys R Us announced it would liquidate all its U.S. operations, leading to the closure of approximately 850 stores and the layoff of up to 33,000 employees by June 2018.
However, the story of Toys R Us did not end there. In October 2018, the brand's intellectual property was acquired by its lenders, leading to the formation of Tru Kids Brands (later Tru Kids, Inc.) in January 2019. This new entity aimed to revive the brand, initially opening two experimental standalone stores in New Jersey and Texas in late 2019. These stores, however, struggled with low mall traffic, exacerbated by the COVID-19 pandemic, and were ultimately closed by January 2021.
A significant turning point came in March 2021 when brand management firm WHP Global acquired a controlling interest in Tru Kids. WHP Global embarked on a multi-faceted strategy to bring Toys R Us back to the U.S. market. A major component of this strategy was a partnership with Macy's, which saw the opening of over 400 Toys R Us shop-in-shops within Macy's department stores nationwide, completed by October 2022.
As of 2026, Toys R Us is actively expanding its physical footprint beyond the Macy's partnership. The company has opened several new standalone flagship stores, including locations at the American Dream Mall in New Jersey and the Mall of America in Minnesota. In September 2025, Toys R Us announced plans to open 10 new flagship stores and 20 seasonal holiday shops across the U.S. by the end of 2025, in partnership with Go! Retail Group. These new stores, such as the one opened in Aurora, Illinois, in September 2025, focus on creating an experiential and nostalgic shopping environment. The brand is also expanding its reach to military families through partnerships with NEXCOM and is pursuing significant international growth, with new stores and e-commerce platforms in over 35 countries, including recent entries into Latin America, the Caribbean, and other global markets in 2025. As of February 2026, Toys R Us boasts 1,664 stores globally, with 2025 marking its largest international expansion year.