Toys R Us might be going bankrupt.
On Monday, shares for toy companies Mattel and Hasbro both fell on concerns the toy seller may soon file for bankruptcy, according to Reuters.
Sources told Reuters that the toy store has been “working to put together a loan to fund its operations in a potential Chapter 11 filing.”
Toys R Us did not respond for comment.
The store is currently the largest toy product customer in the world, ranking just ahead of Walmart and Target.
A Toys R Us bankruptcy would severely damage the toy industry, Reuters reported.
“If there is any kind of bankruptcy filing, it will have a major disruption for all of the toy suppliers,” said Lutz Muller, chief executive officer of toy retail consultancy Klosters Trading Corp., according to Reuters.
Speculation that Toys R Us would go bankrupt began last month, according to CNN, when it hired law firm Kirkland & Ellis to help with its restructuring.
The first sign of the store’s potential fall began in 2015, when it shut down its major store in New York City’s Time Square, according to CNN.
Toys R Us could also develop partnerships and promotions with companies to provide exclusives, paving the way for people to have an extra reason to visit the store.
“Toy companies also have to deal with the fact that many kids are increasingly playing games on consoles, phones and tablets and not with old-school action figures, dolls and other toys,” CNN reported.
When news broke of Toys R Us potentially going bankrupt, the store started trending on social media.
Social media offered its thoughts on the situation, too.https://twitter.com/nuffsaidNY/status/909871898003214337
Carol Roth, a CNBC contributor, wrote in April 2013 that the store needed to start focusing on customer experiences in order to save itself.
Roth wrote the store should add more in-store experiences, including adding in-store entertainment, like birthday party programs.
Roth also suggested it develop a birthday gift service, which parents can use to help them buy gifts despite their busy schedules.
Roth said, "Toys R Us needs to create an entertainment draw for its online and offline business in order for the concept to be competitive vis-a-vis all the other options competing for kids and parents time these days."