Toys “R” Us Canada has won a brief breathing space from creditors as it maps out a turnaround that could include more store closures and the sale of real estate. In a virtual hearing, Justice Jane Dietrich extended the retailer’s court-ordered protection until May, giving management time to explore options without the immediate pressure of demands from vendors or landlords.
Under the court protection, the company can delay payments to its creditors while operating under the supervision of Alvarez & Marsal, the court-appointed monitor. Any significant step — such as additional liquidations or surrendering leases — must clear the monitor first. Alvarez & Marsal and Toys “R” Us Canada have submitted detailed information about the company’s liabilities, staffing and short-term plan for judicial review.
Several major suppliers and landlords stand to be affected. Court filings name Lego, Hasbro, Mattel, Spin Master and Jazwares among the key toy vendors. Significant landlords include Cadillac Fairview, Oxford Properties, Ivanhoé Cambridge and RioCan. The retailer reports roughly $120 million owed to trade vendors and about $25 million to nontrade suppliers, alongside a substantial but unspecified rent shortfall. The monitor’s role is designed to protect creditor interests while management pursues restructuring or asset sales.
On the retail front, the chain now operates 22 stores. Documents show a confirmed lease termination at Upper Canada Mall in Newmarket, with the store slated to vacate by March 31. The company also plans to disclaim the lease at the Niagara Pen Centre in St. Catharines — a move that still requires court approval.
Beyond those two exits, Toys “R” Us Canada has asked the court for permission to issue additional 30-day disclaimer notices at underperforming locations and to run its own liquidation sales of inventory and fixtures. The judge indicated she is unlikely to grant blanket authority to liquidate the entire estate; targeted, case-by-case sales are more probable and will depend on the monitor’s consent before any further closures proceed.
An additional wrinkle: Putman Investments — the owner — is marketing 11 of the 13 properties it leases to the retailer. Those marketing efforts sit outside the formal creditor protection process but could still shape store outcomes if any transactions move forward. Putman Investments, owned by Doug Putman, acquired the business in 2026 and controls several other retail brands, a factor the court noted could influence how lease assignments or sales are handled.
Employees are already feeling the pinch. At the time of the protection filing the company listed about 562 employees — roughly 452 in stores and 110 in corporate roles. After an initial round of cuts and a subsequent reduction of 52 positions, headcount is now near 510. Management warns that more layoffs are possible as restructuring and any liquidation activity continue. Severance, notice obligations and unpaid wages remain central concerns for both creditors and the court.
To limit future exposure, Toys “R” Us Canada has stopped selling gift cards and set a redemption deadline: all previously sold cards must be used by February 16. The company is also seeking court approval to assign or surrender leases and to pursue expedited sales of inventory. Creditors and landlords are expected to scrutinize those applications closely in the coming hearings.
The company attributes its troubles to a mix of factors: persistent inflation, rising labour and occupancy costs, pandemic-era supply-chain issues and the ongoing shift to online shopping. Those pressures have weighed on in-store sales and margins, and led to the closure of 53 stores in the two years before this latest filing.
For now, the May extension buys Toys “R” Us Canada time to weigh strategic moves — from selective liquidations to property sales — while the monitor and the courts oversee how those options unfold.