Toys R Us is preparing to shut down its USA operations and liquidate its assets, Bloomberg reports.
While the situation is still fluid, a shutdown of the USA division has become increasingly likely in recent days, said those people, who asked not to be identified because the information is private, the Los Angeles Times reported Friday.
Toys "R" Us has previously announced plans to close about a third of its 880 stores in the United States.
The company secured a $3 billion loan to help keep stores open during the turnaround but poor results during the holidays cast doubts about the chain's viability. As a result, Toys R Us could close all of its 880 stores in the USA and lay off thousands of workers.
The situation has also deteriorated for numerous retailer's overseas divisions, which weren't part of the bankruptcy, according to the newspaper.
In February 2017, Toys "R" Us laid off 250 workers at its corporate headquarters in New Jersey. Its European arm is seeking takeover bids.
The company has not commented on the report.
Like many traditional retailers, Toys R Us has struggled to maintain sales amid declining customer traffic in brick-and-mortar locations and the rise of e-commerce competitors like Amazon.
The company's struggles aren't limited to its US operations.