Toys “R” Us Files for Bankruptcy
Toys “R” Us (TRU) announced that the company and certain U.S. subsidiaries and its Canadian subsidiary have filed for Chapter 11 bankruptcy in Richmond, VA.
In addition, its Canadian subsidiary will seek protection in parallel proceedings today under the Company’s Creditors Arrangement Act (CCAA) in the Ontario Supreme Court of Justice.
The company intends to use these court-supervised proceedings to restructure its outstanding debt and establish a sustainable capital structure that will enable it to invest in long-term growth.
Outside the U.S. and Canada, the company’s operations include about 255 licensed stores and joint venture partnerships in Asia, which are separate entities and are not part of the Chapter 11 filing and CCAA proceedings.
Its approximately 1,600 TRU and Babies “R” Us stories worldwide are continuing to operate as usual. Customers can also continue to shop online, via its web stores, and utilize customer loyalty programs.
TRU received a commitment of more than $3 billion in DIP financing from lenders including a JPMorgan-led bank syndicate and some existing lenders which are subject to court approval. The company anticipates this commitment to immediately improve the company’s financial health and support its ongoing operations during the court-supervised process. TRU says it is committed to working with its vendors to ensure inventory levels are maintained and product continues to be delivered.
In conjunction with the Chapter 11 filing, TRU has filed a number of customary motions with the bankruptcy court seeking authorization to support its operations during the restructuring process and ensure a smooth transition into Chapter 11 without disruption, including authority to continue payment of employee wages and benefits, honor customer programs, and pay vendors and suppliers in the ordinary course for all goods provided on or after the filing date.
Kirkland & Ellis LLP is serving as principal legal counsel to Toys “R” Us, Alvarez & Marsal is serving as restructuring advisor, and Lazard is serving as financial advisor.
Gorilla Gym Rebrands as Gym1
Velex Corporation, makers of the Gorilla Gym brand of products are rebranding the line to Gym1.
Gym1 better emphasizes the company’s evolving focus on the line’s health benefits and its long-term commitment to more formalized fitness options for kids and adults, says Velex. The “1” in Gym1 was chosen based on customer feedback citing the line as the “one and only gym” families uses regularly. The number also correlates from customer surveys that showed their products were used for approximately one hour a day, even one year after purchase.
The company is more focused on formalized methodologies of fitness for all ages, but especially for kids in the formative years. Co-founder Peter Velikin spearheaded the push saying the rebranding ties directly into its four-prong strategy moving forward: 1) Partnerships with trainers to develop kid-oriented exercise videos 2)certifying trainers for its four-piece Airspeed 11-11 suspension straps training 3) Research its products’ health benefits currently starting by key fitness professionals 4) Recent partnerships to create programs with various kids-oriented health organizations.
Ravensburger Acquires ThinkFun
Ravensburger AG acquired ThinkFun. The move broadens the company’s portfolio of brands, while strengthening its position in the games category of the U.S. toy and game market. ThinkFun joins Wonder Forge, acquired in 2012, and BRIO, acquired in 2015, as the newest company under the recently established Ravensburger North American division.
Bill Ritchie and Andrea Barthello founded ThinkFun 33 years ago. The company has won hundreds of awards for its games, the most famous of which is Rush Hour, a classic logic game that has sold more than 10 million units since it launched more than 20 years ago. More recently, ThinkFun games include titles such as Zingo, Gravity Maze, and Laser Maze.
As a subsidiary of Ravensburger North America, ThinkFun will continue to operate as an independent brand from its Alexandria, Virginia headquarters. Ritchie will stay on as the company’s chief creative officer. ThinkFun will also retain company directors and staff.
Bambini Partners, LLC acted as special advisors to ThinkFun in connection with this transaction.