Toys R Us, the international company with 10 stores in Portugal, has filed for protection against its creditors.
A company spokesman said Toys R Us operations will continue as normal, with no closure plans in place after the US toy chain presented an application for protection against its creditors in the United States and will do the same in Canada.
The company has huge debts and faces fierce competition from online retailers such as Amazon so has taken the step of filing its request at U.S. Bankruptcy Court in Richmond, Virginia where the judge approved a loan of more than $2bn to help stabilise the toy chain.
According to CNBC, the company has a debt of $4.9 billion, with most of the liability related to the company's $7.5 billion leveraged buyout by Bain Capital, KKR & Co. and Vornado Realty Trust in 2005.
"Today marks the beginning of a new era in Toys R Us, where we expect the financial constraints that have gripped us to be resolved in a lasting and effective manner," said a hopeful Dave Brandon, president and CEO of Toys R in the US.
"We are confident that these are the right steps to ensure that the iconic Toys R Us and Babies R Us brands live for many generations."
Company spokesman, Michael Freitag, added, "Like any other retailer, decisions about possible store closures - and openings - will continue to be based on what makes the most sense for the business."
According to information on the company's website, Toys R Us has 873 Toys "R" Us and Babies "R" Us stores in the United States and Puerto Rico, more than 600 international stores and more than 140 licensed stores in 35 countries.
GlobalData Retail estimates that in 2016 about 13.7% of toys were biought online, up from 6.5% in 2011.
"The past decade has seen a dramatic change in the domestic toy market with new channels, increased competition, and new technology all having a deleterious impact on the sector and traditional toy stores. Unfortunately, Toys 'R' Us has not responded effectively to these challenges," said Neil Saunders, managing director of GlobalData Retail.
In Portugal, the brand opened in 1993 and currently has 10 stores. The firm's European operations are not part of the bankruptcy proceedings and Toys R Us says it does not expect any immediate impact on its Portuguese stores.
