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UPDATE 1-Jakks Pacific expects 2017 loss due to Toys 'R' Us bankruptcy
September 20, 2017 / 6:37 PM / 3 months ago

UPDATE 1-Jakks Pacific expects 2017 loss due to Toys 'R' Us bankruptcy

(Adds details, updates share price)

Sept 20 (Reuters) - Toy maker Jakks Pacific Inc said on Wednesday it expects to report a net loss in fiscal 2017 due to charges related to bankruptcy of the biggest U.S. toy store chain Toys ‘R’ Us Inc.

However, Jakks said it does not expect long-term material impact from the bankruptcy, sending its shares up as much as 11.3 percent to $3.15.

Jakks said its uninsured claims from Toys ‘R’ Us amount to less than 3 percent of its outstanding receivables as of Sept. 18.

The toymaker had reported a net income of $1.2 million in 2016.

“2017 continues to present a challenging retail environment, which has now been further disrupted by the Toys ‘R’ Us Chapter 11 filing,” Jakks Chief Executive Stephen Berman said.

The toy store chain filed for bankruptcy on Sept. 19, with a $5 billion long-term debt and received a commitment for up to $3.1 billion in debtor-in-possession (DIP) financing from lenders.

“Nevertheless, the announced availability of DIP financing leaves us optimistic that we can resume our relationship with Toys ‘R’ Us as one of its significant suppliers,” Berman said.

Jakks shares have fallen 7.2 percent since Sept. 17 on growing concerns about the retailer’s impending bankruptcy filing. (Reporting by Gayathree Ganesan in Bengaluru; Editing by Shounak Dasgupta)

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