Toys R Us files for bankruptcy protection

Toys R Us Inc. has filed for bankruptcy reorganization - a victim of the sea change in retailing and the company's own heavy debt burden. But said it would continue to operate as usual heading into the crucial holiday shopping season.

With its spacious, high-ceiling stores that hold thousands of items, Toys R Us pioneered the big-box format for toy sales and once was the go-to destination for people shopping for toys, baby products and birthday gifts.

But as with many brick-and-mortar retailers, Toys R Us was overwhelmed by consumers' rapid shift to buying goods on the internet at sites such as Amazon.com and the severe price competition from those sites.

Although Toys R Us has its own website, it failed to keep pace with those of competitors such as Amazon, Wal-Mart and Target.

In addition, Toys R Us is struggling under $5 billion of debt, much of it stemming from 2005 when a trio of investment companies bought the Wayne, N.J., retailer and took it private.

Toys R Us operates 1,695 stores, including its Babies R Us stores. The chain has one store in Cedar Rapids, one each in Williamsburg, Davenport and Council Bluffs, and two in Des Moines.

All told, the company does business in 38 countries and employs 65,000 people worldwide.

With its filing under Chapter 11 of the U.S. bankruptcy laws late Monday, Toys R Us remains open but is protected from creditors' claims while it works out a court-supervised reorganization plan.

Toys R Us did not announce any store closures - 'in fact, we will be announcing our seasonal hiring push and expect to hire thousands of employees in the coming months,” spokeswoman Jessica Offerjost said in an email Tuesday.