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Toys 'R' Us is forced to file for bankruptcy protection as it is losing the battle against online retailers

Operations outside of US and Canada should be unaffected

An Toys 'R' Us department store in US(Image: Getty Images North America)

Retail giant Toys 'R' Us filed for bankruptcy protection on Monday (September 18) as its debt increases and its margins continue to fall in the face of massive online compeition.

The company is attempting to restructure and remedy the almost $5 billion (£3.6 billion) that it has in debt, the Mirror reported.

Operations outside of US and Canada should be unaffected as they are separate entities from the American company.

The Toys 'R' Us UK subsidiary is not affected and it's "business as usual" meaning that the stores in Uxbridge, Hounslow, Staines, Kingston, Brent Cross and Kensington should all remain open for the forseeable future.

The Chapter 11 filing has secured more than $3 billion dollars (£2.2 billion) in financing in order to help keep its doors open.

The online shift is having a massive impact on traditional retailers and Toys 'R' Us is the latest to seek help in combating the ongoing issue.

A total of 24 US retailers have filed for Chapter 11 protection this year compared with the 18 for all of last year.

The big players in the toy market face growing competitions from the likes of online magnates such as Amazon, Walmart and eBay.

An Toys 'R' Us department store in US(Image: Getty Images North America)

With more than 64,000 employees worldwide in 1,600 stores, the impact of full global bankruptcy would be immense.

The Christmas season is approaching and it accounts for around 40% of the group's annual sales.

Dave Brandon, chairman and chief executive of Toys 'R' Us, said: "As the holiday season approaches, our global team members are ready to serve the millions of kids and families who will be shopping with us.

“Today marks the dawn of a new era."

Toys 'R' Us has suffered falling like-for-like sales for three quarters in a row and reported a quarterly net loss of 164 million dollars (£121 million) on sales of 2.2 billion dollars (£1.6 billion) in June.

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