Toys "R" Us Canada has filed for creditor protection in an Ontario court. The move comes after the retailer shut down 53 stores over the last two years and faced a wave of lawsuits from landlords and suppliers who say they haven't been paid.

In court filings, the company explained that creditor protection was its only option. Management pointed to several major hurdles, including high inflation, rising wages, supply chain issues, and the ongoing shift toward online shopping. Despite cutting staff, closing underperforming stores, and trying to find new ways to make money throughout 2023 and 2024, the business remained unstable.

The company currently owes at least $120 million to its vendors, along with significant unpaid rent. While its 22 remaining stores are still open for now, the retailer warned that more locations could close. Alvarez & Marsal, the firm appointed by the court to oversee the process (the monitor), noted that the company might have to sell off its remaining assets or look for a buyer for the rest of the business.

A numbered company operating as Putman Investments has owned Toys "R" Us Canada since 2021. Putman also manages several other well-known brands, such as HMV, Sunrise Records, FYE, Ricki's, Cleo, and Northern Reflections. Last year, Everest Toys, a sister company to the toy retailer, was also forced into receivership due to unpaid debts.