Toys ‘R’ Us Canada Seeks Creditor Protection

Bassyonni

Published: February 3, 2026 8:24 PM ET

Toys “R” Us Canada has filed for creditor protection as it navigates significant financial difficulties. This move comes after the retailer closed 53 stores in the past two years and faces lawsuits from unpaid suppliers and landlords.

Toys “R” Us Canada Seeks Creditor Protection

The Ontario court filing marks a crucial step in the company’s effort to restructure and explore potential sale options. This action is designed to shield the toy retailer from creditors while it formulates a path forward under challenging market conditions.

Current Challenges Facing the Retailer

Toys “R” Us Canada has cited several key issues contributing to its financial strain:

Inflationary pressures affecting costs.
Rising labor expenses.
Supply chain disruptions.
Shifts in consumer behavior towards e-commerce.

Despite its attempts to stabilize operations—including laying off staff and closing underperforming stores—the efforts have proven insufficient. The company now reports owing at least $120 million to vendors and significant amounts to landlords.

Retail Operations and Future Plans

Although 22 locations remain operational, the company has indicated that it may reduce its retail footprint further. Alvarez & Marsal, a consulting firm appointed to assist during the creditor protection process, has outlined several potential options:

Liquidation of remaining store inventory, furniture, and equipment.
Development of a structured sales process for its locations.

Toys “R” Us Canada is owned by a numbered entity operating as Putman Investments. This company acquired the toy retailer from Fairfax Financial Holdings in 2021 and also manages several other brands, including HMV and Sunrise Records.

Recent Business Changes

Over the past year, Putman Investments has closed its T. Kettle stores and a brief venture into home goods with Rooms + Spaces. The group’s associated company, Everest Toys, faced receivership last year, further highlighting the ongoing challenges within the retail landscape.