WASHINGTON – Toys R Us plans to sell or close all of its 800 stores in the United States after six decades in business, according to the Washington Post.
The closures could affect as many as 33,000 jobs. Closures are expected to happen over time and not all at once, the Washington Post reports.
Six months ago, the struggling toy company filed for bankruptcy. The paper reports Toys R Us has struggled to pay off $8 billion in debt.
The company announced Wednesday it is closing all of its stores in the United Kingdom.
Toys R Us is the last megastore dedicated to toys. Without it, toymakers will struggle to promote anything but their most popular items. The death of a top customer is the last thing that toy creators Mattel and Hasbro need right now.
Mattel’s overall sales during the fourth quarter (i.e, Christmas) fell 12% from a year ago, led by big drops for the Fisher-Price, American Girl and Lego competitor Mega Bloks brands.
Hasbro reported a decline in sales during the fourth quarter, despite the fact that the Nerf and My Little Pony owner now holds nearly all of the lucrative licenses tied to movies from Disney and its many other studios — Pixar, Marvel and Lucasfilm.
Hasbro said that Star Wars product sales actually fell in the fourth quarter, as did sales of Disney Frozen toys.
The softness in the toy industry is partly due to the rise of video games and other high-tech toys that kids are increasingly playing with instead of action figures, dolls and board games.
But the shifting tide in retail isn’t helping either. The dominance of Amazon has put pressure on many consumer products companies as Amazon has made a relentless push to lower prices.
Recent struggles at Walmart and Target are also hurting Hasbro and Mattel.
Walmart is the largest customer for Mattel and Hasbro, accounting for about 20% of total sales for each toy maker. Both toy companies get nearly 10% of their revenue from Target too.
CNN contributed to this report.