Toys R Us Canada kept every store through its 2017 bankruptcy — then filed again in 2026

On 3 February 2026 Toys R Us Canada announced that it had sought creditor protection under the Companies' Creditors Arrangement Act (CCAA). It said it was evaluating strategic alternatives and reducing its retail footprint. All 22 Toys R Us locations, each with a Babies R Us presence, stayed open during the process, but its e-commerce platform was suspended, according to court documents.

The company owed $120 million to vendors and 'substantial amounts' to landlords. Court documents said operational and financial pressures over several years had reduced liquidity; sales fell in 2023 and 2024 and many stores became unprofitable. The company had closed unprofitable locations, laid off staff and negotiated with suppliers.

Toys R Us Canada had also filed for CCAA protection in 2017 as part of the wider Toys R Us group restructuring, which included a US Chapter 11. It closed no stores then and so could not exit the leases of underperforming stores. In 2026 the company pointed to that decision as part of the trajectory behind its new filing.

Owes $120M to vendors plus substantial rent to landlords; e-commerce suspended; sales fell in 2023 and 2024.

In the 2017 restructuring it closed no stores, so it was unable to get out of the leases for weak locations.

Many stores became unprofitable and sales declined in both 2023 and 2024.

Cost cuts, layoffs, store closures and supplier negotiations did not restore liquidity.

The $120M owed to vendors and heavy landlord obligations left it little room to continue without court protection.

A restructuring is the one window to shed bad leases. Skipping closures to protect the footprint can leave the same stores to drag the business down years later.

Toys R Us Canada said it was evaluating strategic alternatives and reducing its retail footprint, with stores open during the CCAA process. Retail Dive's report does not cover which stores would close or how the case ended.