Not because it was expected, the news has attracted less attention. The truth is that it has been confirmed that the toy company you are going to file for bankruptcy law from the United States. Given the serious difficulties for his debt, but also motivated by the important problems in his line of business and that has led him to generate some business results below official estimates. One of the reasons to understand this situation is due to the moment that the toy sector is going through in the face of the strength of the online market that has not stopped growing in recent years.
This news joins the problems that the Danish toy maker Lego is also going through. To the point that it has been immersed in a small business crisis that has led it to redefine part of its workforce. A fact that reflects the delicate moment that the toy industry is experiencing on an international level. With business results that were not being satisfactory for their interests. In addition, of other small companies of these characteristics that are suffering from a lower demand. Partly derived from the appearance of toys in online format.
Well, the current situation of Toys could be foreseen after the decision a few months ago of its emblematic store in one of the most relevant neighborhoods of New York. After being open to the public for more than fifteen years. It is not surprising that at that time some specialized media warned about the economic situation of one of the icons of the world toy store, as has happened at the moment. With a debt close to 5.000 million dollars and that you are done with this situation in your finances.
Toys in the eye of the hurricane
One of the aspects to note at this time is that Toys is not listed on the equity markets from any country. So this measure will have no effect on investors. If you are one of these people, you should know that the toy retail chain had no choice but to leave the stock market a decade ago. To in this way, start a hard adjustment to your business accounts. After having plummeted their prices in the financial markets and leading to a very important cut in their shares. In this sense, the savers who took positions in this value had to suffer severe losses in their savings.
This is something that is not going to happen with the Toys bankruptcy right now. Not surprisingly, it is not listed on any financial market. Not even in the secondary ones, so its current situation will not affect the investment sector. Although on the contrary, it can have an impact on companies in the same sector. Nevertheless, in Spain there are none of these characteristics. You would have to go to the markets of the United States, Great Britain or Germany to find companies listed with this identity. Most of them linked to other lines of business and that allow them to diversify their business accounts.
Your stores are operating normally
This important economic measure by Toys at the moment does not affect the stores it has throughout the Spanish geography. Like its over 1.600 establishments around the world. Without having any repercussions for the bankruptcy declaration. In this way, users who wish to buy your products will be able to do so as before. With a complete normality in the provision of its services and with the same range of products intended for the most infantile public.
Specifically, the toy company provides in Spain a network of 51 establishments and a total of 1.600 employees who, as they insist from this trademark, will not be initially affected by this business process. A piece of news that joins others in the sector that do not indicate that it is going through the best of times. With a competition in business lines that were not present in past years. Curiously, it was this company, Toys, which aroused much expectation among consumers for the innovative offer of its toys. To the point that their response seemed to motivate the establishment of this brand in the national geography.
What will happen now?
After the bankruptcy situation has been announced, there are many steps that will have to be taken in this complex administrative process from now on. To begin, they must assume an imminent payment on a total of 400 million. Or what is the same, 334 million euros. This has been one of the most relevant reasons why this important decision has been precipitated. Being in a clearly deficient financial position that prevented them from carrying out any kind of maneuvering to correct their serious problem of lack of liquidity.
In this way, and with the measures taken this week, Toys is in a position to refinance its debt more calmly. To the point that you can even purchase more products and finance your business operations. This is one of the reasons why your line of business can survive in the future. And that underpins the decision do not close most of its outlets. As for example, it is happening with its stores in Spain. From this perspective, we cannot be talking about a terminal situation as it might be thought at first.
Future of the toy company
Either way, the intention of its leaders is to keep ahead with the business. Since they have advanced their objective of continuing to work with their creditors to restructure the long-term debt. For which the first step they have had to take is to reach this bankruptcy situation. With the goal that they can solve these problems in their accounting and can continue with their activity at any time. All this despite the impact that this news has caused in the business world. And more specifically in the segment of toys and leisure items aimed at the segment of the younger population.
Precisely at a time when companies on the other side of the Atlantic are having a good time. Where mostly the benefits are increasing quarter by quarter. Giving wings to US equities to seek a better return on the shares of listed companies. Where the specific case of Toys seems to be an isolated case with respect to the main lines of business in this country.
Stores will continue to operate
In any case, it is necessary to know that the establishments not covered by this operation will continue to operate as usual. Where most of them, in the opinion of the directors of Toys, are profitable and are giving benefits to the company. Not surprisingly, the problem is not due to the fact that business is going extremely badly. But on the contrary, the cause must be sought in the debt so great that it has as a consequence of the business expansion to a good part of the most important countries in the world.
Another aspect that must be taken into account in this process is that if you had listed your shares in the equity markets things would have changed substantially. In the sense that this reality would have been felt in the price of the securities. With a more than foreseeable depreciation in its shares. Even causing a stampede by investors. A factor that would have aggravated the situation because it is being experienced by one of the most relevant references in the toy industry. From this scenario, stock market users should not worry about the collateral effects that may be generated from now on.
Despite the impact of this news in the media, what has happened to Toys is nothing new. Rather, it happens to a part of the companies that are in the same situation. With few novelties in the measures they are taking during this difficult week. Its greatest incidence has had to do with the popularity of the business. In addition, for being present in many of the international destinations, as in the example of the Spanish market itself.
Where, one of the most relevant aspects is that a US firm has received a financing commitment of more than 3.000 million dollars by a syndicated group of banks led by JP Morgan and other lenders to be able to pay its suppliers, as reported the company itself. It is also worth noting that operations outside the United States are separate and therefore not part of the bankruptcy process. under judicial supervision. In other words, Spanish consumers will be able to continue acquiring the products of this commercial brand as they have been up to now. Without any visible novelty in the quality of the service they offer from all their commercial establishments.