Toys ‘R’ Us throws in the towel, files plan to close all of its remaining 735 U.S. stores, including two in Riverhead

Riverhead’s main commercial corridor will soon have another empty “big box” store: Toys “R” Us is planning to wind down operations and close its remaining 735 stores across the U.S., according to documents filed today the Bankruptcy Court for the Eastern District of Virginia.

The retail toy giant, a fixture in American commerce for more than 60 years, was struggling under a debt burden of nearly $8 billion and filed for Chapter 11 bankruptcy protection in September. At the time, it said it had secured over $3.1 billion in financing, which allowed the company to remain in operation in the hope of a successful holiday season — a season that has historically contributed approximately 40 percent of the retailer’s annual revenue, according to court documents. But the holiday season didn’t come close to being the company’s salvation.

The liquidation plan calls for Toys “R” Us to enter into agreements with several liquidation companies to conduct the wind-down and final sale, which the agreements require to be completed by July. The plan must be approved by the bankruptcy court. A hearing is scheduled for Tuesday.

At the filing of its bankruptcy petition in September, Toys “R” Us initially planned to close about 150 stores; it increased the number to 182 in January. The 34,000-square-foot Riverhead store was not on the list of closures.

Toys “R” Us owns the Route 58 property, which was originally built as a specialty supermarket called Gamaldi’s Meat Way in the early 1990s.

The company also operates a 4,330-square-foot “express” store in leased space in Tanger Outlets; it will also close, according to court documents.

The closures may result in the loss of more than 30,000 jobs across the country. Job losses by location were not specified in the court filings.

The closure will create a fourth large-space vacancy on Route 58. In 2016, Sports Authority closed its doors in the location directly across the road from Toys “R” Us. Office Max, located in Tanger 3, closed late last year. The former Walmart location on Route 58 east of Ostrander Avenue is still vacant after the retail giant moved to a new location on the west end of Route 58, across from Tanger Outlets.

Riverhead Town, as a result of a master planning process begun two decades ago, adopted “Destination Retail” zoning that required the creation of “big box” retail spaces along the Route 58 corridor. National chains have flocked to the corridor, but the future of brick-and-mortar retail in the age of online shopping leaves the future vitality of Riverhead’s “destination retail” corridor in question. Town officials have acknowledged the need to discuss plans for Route 58 in the post-destination retail age, even as retailers open new stores — such as PetSmart, Marshalls, Ulta Beauty and Home Goods in the newly constructed retail center adjoining Costco — and property owners move forward with plans to build still more retail spaces in the corridor.

Correction: This article has been amended to correct the name of the new pet store on Route 58, which was misidentified in the original.