Toys 'R' Us, nation's largest toy retailer, files for bankruptcy protections

SAN FRANCISCO (KGO) -- Toys 'R' Us, the nation's biggest toy retailer filed for bankruptcy protection Monday night.

The company hopes to emerge from chapter 11 as a leaner and stronger company and its loyal customers are cheering them on.

Sarah Gullemen collects Rick and Morty action figures - items she's only been able to find at Toys 'R' Us. Not even Target or Walmart carries them.

But beyond that, Gullemen simply prefers her childhood store. "Day after Christmas, every birthday and any special occasion, do good at school, go to Toys 'R' Us," Gullemen said.

That sentiment is shared by many shoppers who are hoping the company can work out its problems.

Toys 'R' Us has faced stiff online competition while being loaded with debt in a buyout more than ten years ago.

But by filing for chapter 11 bankruptcy protections, the company can refinance and stay open while it restructures.

In a statement, the company's chairman and CEO said, "Today marks the dawn of a new era at Toys 'R' Us where we expect that the financial constraints that have held us back will be addressed in a lasting and effective way."

"I think they'll stay afloat. It's a great name. I think they'll be a lot smaller. I think just like you're seeing with Macy's and other retailers they're going to downsize. But I think the betting money is they're going to be around this Christmas as well as next Christmas," SFSU College of Business Professor Mitchell Marks, Ph.D., said.

Those are encouraging words loyal shoppers want to hear.

"Toys 'R' Us has been a big part of the community from one side of the coast to the other side of the coast," customer Chris Dabbelt said.

The company has already made some changes - among them a new web store, launched well ahead of the holiday season.

As of April 29, the retailer listed a debt of $5 billion.

Toys "R" Us has more than 1,600 stores worldwide.