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Toys 'R' Us filed for bankruptcy but said its stores will remain open for business

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Updated September 19, 2017 06:38 AM EDT

Toys 'R' Us filed for bankruptcy late Monday ahead of the holiday shopping season but said its stores will remain open for business.

"The company’s approximately 1,600 Toys 'R' Us and Babies 'R' Us stores around the world — the vast majority of which are profitable — are continuing to operate as usual,” the company said in a statement. “Customers can also continue to shop for the toy and baby products they are looking for online."

The Wayne, New Jersey-based company announced that it was seeking relief through the U.S. Bankruptcy Court for the Eastern District of Virginia in Richmond. Its Canadian subsidiary will seek similar protection through a court in Ontario.

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Toys 'R' Us said the filing will help the company restructure its debts and get on track for long-term growth.

"Together with our investors our objective is to work with our debtholders and other creditors to restructure the $5 billion of long-term debt on our balance sheet, which will provide us with greater financial flexibility to invest in our business ... and strengthen our competitive position in an increasingly challenging and rapidly changing retail marketplace worldwide," said Toys 'R' Us CEO Dave Brandon.

The Associated Press contributed to this report.

Toy retailer Toys 'R' Us could soon file for bankruptcy, according to reports by The Wall Street Journal and CNBC.

The move may be the chain's last resort in recovering from $5 billion of debt -- the result of a 2005 buyout, according to The Wall Street Journal.

According to CNBC, the filing could happen by the end of the week.

The buyout over a decade ago, by owners Kohlberg Kravis Roberts, Bain Capital Partners and Vornado Realty Trust, carried a hefty price-tag of $6.6 billion.

Taking the company private left the retailer in the red.

According to CNBC, the chain has previously taken steps to stave off bankruptcy, hiring a law firm and working with creditors ahead of a debt of $400 million due in 2018.

The effort has apparently been unsuccessful; news service Reorg Research reported Toys R Us could file for bankruptcy as soon as Monday, according to CNBC.

This report was provided by Eleanor Mueller of Sinclair Broadcast Group.

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