Toys 'R' Us is preparing to close all its U.S. stores, reports say

The toy chain has been circling the drain for years.

It's been a long-time coming but it appears the worst case scenario is being realized for Toys "R" Us.

The toy chain has been circling the drain for years, eventually entering bankruptcy in September and the closure of 180 stores in January hasn't been enough to stave off the inevitable.

Now Bloomberg and the Wall Street Journal, citing sources with knowledge, are reporting that the discussions within the company have now turned to shutting down its entire U.S. operations.

The situation is still "fluid," Bloomberg notes, but closing all its U.S. stores "has become increasingly likely in recent days" with hope fading that a buyer for the company will emerge.

Toys "R" Us still has around 700 stores nationwide following January's cull, although only five of those are left in Minnesota.

There are four Toys "R" Us stores – in Maplewood, Burnsville, Rochester and Blaine – and Babies "R" Us in Maple Grove (the Blaine store is also a Babies "R" Us).

While the rise of Amazon and online shopping is often cited as the reason for its demise, Motley Fool writer Daniel Kline argues that it truly started when big box giants like Walmart and Target created their toy departments, which pushed prices lower and made a trip to Toys "R" Us less unique.

And it failed to evolve in response. CEO David Brandon said in the company's September bankruptcy filing it wanted to change stores to create "interactive spaces" and "live product demonstrations," which is something it should have done from the start, Kline writes.

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