Toys 'R' Us Is Said to Miss Vendor Payments as Woes Mount

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Now toy companies will have to battle with the big-box stores like WalMart and Target for the much valued and limited shelf space inside their stores and count on Amazon for their sales.

A source told CNBC that Toys R Us is in the process of drafting the court motion for its liquidation plan and the toy store has also not paid some of its vendors this week.

Toys "R" Us reigned supreme in the 1980s and early 1990s, when it was one of the first of the "category killers" - a store totally devoted to one thing: toys.

The kids may not wanna grow up, but they'll still have to do it - and without Toys "R" Us.

Toys R Us has missed payments to some suppliers in recent days as its USA division heads toward a likely liquidation, according to people with knowledge of the situation.

A vehicle drives near the main entrance for the Toys R Us global resource center, Wednesday, Jan. 24, 2018, in Wayne, N.J. Toys R Us, squeezed by and huge chains like Walmart, announced plans in January to close 180 USA locations and in recent days has missed payments to some suppliers as its USA division heads toward a likely liquidation.

The bleak situation lends evidence to the notion that Toys "R" Us is moving toward winding down its USA operations for good. In January, it was announced that 182 of its over 800 locations - almost 20 percent of its stores - would be closing come February, but before February was through, the news of a further 200 closures was announced.

Shares of Hasbro and Mattel slipped on the Toys R' Us news. Now Toys "R" Us and other category killers like the now-defunct Sports Authority, Borders and Circuit City, are being upended by online retailers.

Toys "R" Us also announced in February that it would also close locations in Dedham, Millbury, Bellingham, Northborough and Framingham.