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Update: Toys R Us to sell or close all US stores

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Update: Toys R Us to sell or close all US stores

Toys R Us Inc., which sought Chapter 11 protection in September 2017, said March 15 that it filed new bankruptcy court documents to begin the process of winding down its U.S. business, which will result in the sale or closure of all 735 stores in that market.

This came shortly after the company's U.K. division announced that it would begin a program to shut down all of its stores in the country.

In addition, the toy retailer said it plans to pursue a reorganization and sale process for its Canadian and overseas operations in Asia and central Europe, including Germany, Austria and Switzerland. Meanwhile, its businesses in Australia, France, Poland, Portugal and Spain are considering their options, which include potential sales. Stores in those markets remain open.

Toys R Us also noted that it is looking to make a deal that would keep up to 200 U.S. stores running by packaging them with its Canadian business and that it has held talks with interested parties.

CEO David Brandon said in a statement: "This is a profoundly sad day for us as well as the millions of kids and families who we have served for the past 70 years."

Ahead of the filing, Brandon held a conference call with employees to inform them of the fate of the U.S. stores, according to a March 14 report in The Wall Street Journal, which noted that closures would threaten up to 33,000 jobs.

"We're putting a for sale sign on everything," Brandon reportedly told employees. "Frankly, all anyone has to do is offer one dollar more [than the liquidation firms]."

The liquidation papers were filed the evening before a bankruptcy court hearing set for March 15, the Journal said.

Toys R Us in January said it planned to shut down about 180 underperforming stores in the country, and the retailer reportedly added 200 more store closures the following month.

Toys R Us counts Hasbro Inc. and Mattel Inc. among its largest vendors.

Toys R Us declined to comment. The company's bankruptcy attorney, Joshua Sussberg at Kirkland & Ellis LLP, also did not reply to requests for comment.