"While the decision of Toys R Us to appoint restructuring advisors is not necessarily a sign that bankruptcy is imminent, it is an indication that the company is in a very uncomfortable financial position," said Neil Saunders, Managing Director of GlobalData Retail.
She added that Toys R Us would likely provide an update on these matters as well as its plan to perform well during the crucial holiday season on the company's next earnings conference call, expected in late September.
Toys R Us is owned by a pair of private equity firms Kohlberg Kravis Roberts and Bain Capital Partners as well as commercial real estate company Vornado Realty Trust.
As GlobalData Retail's Saunders said, "It suffers competition from online and physical generalists who happily discount toys to drive customer traffic and sales for stores and websites."
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