Global toy retailer suspends online operations, closes stores
Fernanda Tronco
Fri, February 6, 2026 at 1:07 PM EST
7 min read
It can feel as though nearly every childhood staple is slowly disappearing, bringing an end to years of shared memories.
While every generation insists its nostalgic favorite shops were the best, there is one retail chain that stands above the rest, one that few others have ever managed to rival.
For decades, stepping into one of its stores felt like entering a wonderland. Colorful aisles were packed with toys from nearly every category imaginable, appealing to children of all ages and interests. While shopping is normally a chore most kids dread, here it became an exciting experience, with each visit feeling like a special reward.
Many shoppers still remember the awe of that first-ever visit and the thrill of leaving with one or several toys they couldn't stop thinking about, at least until the next must-have trend came along.
Founded in 1948 as a baby furniture store in Washington, D.C., Toys "R" Us grew into a global toy, clothing, and baby products retail giant. At its peak, the company operated over 1,500 stores and e-commerce businesses across more than 35 countries.
However, mounting financial and operational challenges in recent years have led consumers to wonder whether Toys "R" Us would become yet another beloved childhood institution to fade away. Now, a new development has put the brand back in the spotlight.
Toys "R" Us Canada shuts down its e-commerce site
On February 3, Canadian consumers woke up to find the Toys "R" Us Canada website shut down. A message on the site states that the company's e-commerce platform is unavailable due to proceedings under the Companies' Creditors Arrangement Act (CCAA), while encouraging customers to continue shopping at its physical stores.
That same day, Toys "R" Us Canada, owned by Putnam Investments, officially filed for creditor protection under the CCAA. This Canadian federal law allows corporations carrying more than $5 million in debt to restructure under court supervision to avoid bankruptcy and continue operations.
According to court filings, Toys "R" Us Canada reported a net loss of $170 million CAD ($124.1 million USD) for the ten-month period ended November 29, 2025, with assets of approximately $127 million CAD ($92.7 million USD).
The retailer also owes roughly $120 million CAD ($87.6 million USD) to vendors, along with $4.7 million CAD ($3.43 million USD) in unpaid rent, property taxes, and other obligations tied to its remaining stores. The filing also shows more than $36 million CAD ($26.3 million USD) in outstanding gift card liabilities, as well as ongoing litigation related to unpaid rents and commercial disputes from vacated store locations.
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Toys "R" Us Canada currently operates 22 stores, all of which are expected to remain open during the restructuring process. However, the company's store locator still lists around 40 locations, a number that has not been updated following multiple closures and market exits.
The retailer employs about 654 full-time and part-time workers across Canada, none of whom are unionized or have registered pension plans.
Toys "R" Us' tumultuous financial history and Canada's separation
Toys "R" Us filed for Chapter 11 bankruptcy protection in September 2017 to restructure its U.S. and Canada businesses, as it was $5 billion in debt. At the time, the company operated around 1,600 stores worldwide under the Toys "R" Us and Babies "R" Us banners and was owned by an investment group that included Bain Capital Partners LLC, Kohlberg Kravis Roberts & Co., and Vornado Realty Trust.
The restructuring effort ultimately failed in the U.S., forcing the liquidation of all remaining American Toys "R" Us stores by June 2018.
Following the liquidation, the brand's U.S. intellectual property was sold to Tru Kids, Inc. in early 2019, before being acquired by WHP Global in March 2021.
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Canada's story unfolded separately. The brand's Canadian subsidiary filed for CCAA protection in 2017. Less than a year later, Fairfax Financial agreed to acquire approximately 80 Canadian stores for $300 million CAD ($219 USD), allowing the chain to continue operating under the Toys "R" Us name.
Putman Investments later purchased Toys "R" Us Canada in August 2021, making the retailer fully independent from its U.S. counterpart and positioning it for expansion across the country.
The state of the toy industry
The global toy and games market was valued at around $324 billion in 2023 and is projected to reach $439.91 billion by 2030, growing at an average annual rate of 4.3% between 2024 and 2030, according to Grand View Research.
Electronic games accounted for the largest share of industry revenue in 2023, representing more than 52% of total sales. While Toys "R" Us Canada does carry some electronics, such as children's watches and handheld consoles, the majority of its inventory remains focused on traditional toys, like dolls, action figures, and playsets.
Despite shifting consumer preferences toward digital entertainment, recent data suggests renewed momentum for the traditional toy sector.
After three consecutive years of decline, the global toy industry rebounded in 2025, driven by pop culture relevance, licensed products, and increased engagement from teens and adults, according to Circana.
Across 12 global markets, including Canada, the U.S., the UK, and several European and Latin American countries, sales increased by 7% in value year over year, while unit sales grew 3%, as average selling price rose 3%.
"This positive performance marks a pivotal turning point for the industry, signaling that toys have reasserted their role as affordable entertainment and cultural touchpoints for consumers of all ages," said Circana Global Toys Industry Advisor Frédérique Tutt, who has more than 20 years of experience in the sector.
Still, the industry faces new hurdles. Recently implemented U.S. tariffs on foreign-made goods have raised costs, while broader economic uncertainty has slowed consumer spending.
"When tariffs hit us, it was a challenge, because you don’t want to raise your prices," said Spin Master Toy Division President Doug Wadleigh to License Global. "The consumer already has enough economic pressure on their shoulders, and you don't want to take the magic out of the toy."
What analysts are saying about Toys "R" Us Canada's future
While the overall toy market shows signs of recovery, analysts caution that rising operating costs, especially across a large national footprint, can weigh heavily on retailers with underperforming locations.
"At the end of the day, it doesn't matter what your sales are, it matters what your expenses are against your sales," said A.D. Hennick & Associates Inc. President and CEO Alex Hennick to Retail Insider. "If you have a lot of locations that are not performing, it takes away from what the stronger stores are doing."
Others note that Toys "R" Us' struggles reflect broader challenges facing brick-and-mortar retail.
"It's always difficult to see an iconic brand like Toys 'R' Us reach this point," said Business Sales and Operations Expert Robert Newman on LinkedIn. "These moments are rarely about a single decision, but about long-term shifts in strategy, cost structures, and customer expectations."
"Part of me can't help but wonder whether, with the right leadership experience and timing, the ending of this story could still be different," Newman added.
Despite having closed roughly 60 Canadian stores and exiting multiple provinces since it last updated its website's About Us section around 2024, some analysts believe the current restructuring does not necessarily signal the end of Toys "R" Us' presence in Canada.
"I don't think it’s a death story right now, but I think it is just the reality of the market," said Retail Leadership Institute Director and Toronto Metropolitan University Associate Professor Jenna Jacobson to the Edmonton Journal. "I would like to hope to think that it’s a way of right-sizing."
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This story was originally published by TheStreet on Feb 6, 2026, where it first appeared in the Economy section. Add TheStreet as a Preferred Source by clicking here.
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