Toys“R”Us Japan filed with the Tokyo District Court for application of the Civil Rehabilitation Act, announcing total liabilities of approximately ¥13.2 billion. The business is scheduled to be transferred to Pan Pacific International Holdings on 30 October.
Toys“R”Us Japan filed with the Tokyo District Court for application of the Civil Rehabilitation Act on 1 October 2026 and received an order commencing rehabilitation proceedings on the same day. Total liabilities were approximately ¥13.2 billion, making this the largest bankruptcy of a toy retailer to date. A business transfer agreement was signed with Pan Pacific International Holdings (PPIH), with the transfer scheduled for 30 October subject to court approval.
Since its establishment in 1989, Toys“R”Us Japan grew through an American-style large-store model targeting mainly families, but its performance deteriorated in recent years amid Japan's declining birth rate, the spread of online shopping and the emergence of rivals. Sales fell from approximately ¥194.365 billion at their peak to approximately ¥130.1 billion in the fiscal year ended in 2019, and then to approximately ¥75.2 billion in the fiscal year ended December 2025, resulting in a net loss for the eighth consecutive fiscal year.
The biggest factor cited is that changes in the market environment made a large-store-led business model unsuitable for the Japanese market. The spread of online shopping, the expansion of low-priced baby and children's products at consumer electronics retailers, and the shift to downloadable game software further intensified competition, and are said to have disrupted the strategy of the giant known as the “black ship.”