A sales process has been launched for Toys”R”Us Canada to try and save the company that filed for creditor protection in February—but it needs to find a deal fast.

The retailer is open to multiple options, including a sale, deals for partial assets, recapitalization or a restructuring.

Companies looking to bid for the retailer are already on the clock; the deadline for the first phase of bids is May 1. Phase two bids and binding offers have until the end of May, and the selection of a successful bid or an auction is scheduled for June 5. The whole process, including court approval, has to be wrapped up no later than July 13, according to Alavarez & Marsal Canada, which is handling the process.

The consulting company, which focuses on corporate performance improvement, has released a sales sheet on the company. It notes that Toys”R”Us Canada’s full-year 2025 revenue for its 17 stores was US$71.1 million. The Toys “R” Us brand contributed 68% of that revenue, with Babies”R”Us delivering 29% and its music/other category bringing in the final 3%.

Mounting debts and a slew of lawsuits from suppliers and landlords drove the retailer to file for the Sale and Investment Solicitation Process under Canada’s Companies’ Creditors Arrangement Act (similar to Chapter 11 protection in the US).

The company was one of the biggest pure toy retailers in Canada. A sale could have ramifications for Canada’s whole toy retail industry, which has been in a precarious position thanks in part to the collapse of the company, as well as its primary distributor Everest Toys falling into receivership last year.

Toys”R”Us Canada is not connected to the US and worldwide Toys”R”Us brand. This sale is the latest chapter in a roughly decade-long saga since its split from the worldwide brand, involving multiple ownership changes, including by Fairfax Financial (2018) and Putnam Investments (2021), its current owner.

In contrast, the worldwide Toys”R”Us brand has actually been on the rise recently across both store growth and content.

Image courtesy of Toys”R”Us Canada