Sources say that the toy giant Toys R Us could file for bankruptcy as soon as this week. However, the plans for filing are not set in stone and are subject to change. The decision to file comes largely from a $400 million debt which is due in 2018. The company would hope to square away their debt issues before the big holiday season which traditionally drives the retailer’s sales.
Another problem comes from the growing popularity of tablets. More and more children are starting to value tablets and other devices over traditional toys. Vendors may also choose to focus on a direct-to-consumer model through a larger online focus. For manufactures, direct-to-consumer sales tend to be more profitable than selling to a third party retailer like Toys R Us.