Toys “R” Us Canada, once a reliable source of youth employment and seasonal work, has closed more stores, being sued for alleged unpaid rent
A wave of store closures, mounting landlord lawsuits and surprise shutdowns has turned Toys “R” Us Canada into a live case study in retail risk for HR leaders and employers across the country.
According to an Edmonton Journal / Financial Post analysis, the national toy chain has fallen from 103 locations to only 22 remaining stores, after closing 57 sites over the past year, including another 19 in just the last two months and its final location in British Columbia.
The Canadian Press (CP) has separately reported that at least seven commercial landlords are suing Toys “R” Us Canada for a combined $31.3 million in unpaid rent and damages tied to sites across multiple cities.
For Canadian employers, the chain’s retreat is more than a brand story. It signals concentrated layoff risk, potential notice and severance issues and heightened scrutiny from landlords and lenders across retail.
The Edmonton Journal / Financial Post estimate the company may have reduced more than 1,250 jobs nationwide over the past year, based on an average of 22 employees per store.
Toys “R” Us sudden closures and unpaid rent claims
One sign of stress came this month in Langley, B.C., where the last Toys “R” Us in the province shut its doors abruptly after a notice on the building cited nearly $100,000 in unpaid bills. The CP report says landlords in communities including Belleville and Oakville allege missed rent payments through 2024 and 2025, with some leases terminated outright.
Moritz Steinbauer, senior vice-president at credit-rating agency DBRS Morningstar, told the Edmonton Journal / Financial Post that while retailers do routinely review their footprints, the pattern at Toys “R” Us suggests more than routine pruning.
“You always, continuously, right-size business,” Steinbauer said, but he added, “But I think the history that we’ve already gone through (with Toys “R” Us), and the amount of closures are not pointing toward a retailer that is in a growth mode.”
He also pointed to operational warning signs, noting that the company’s website was down for days.
Currently, the site’s shop appears open, but items are marked as available in-store only.
“Typically, retailers will not put their homepage down for multiple days for website improvements. So that is probably something I would watch pretty closely,” Steinbauer said.
For HR leaders across retail, the Toys “R” Us fallout highlights the importance of proactive workforce planning when store networks are under review. The closures have already erased outlets in major markets such as Calgary and across British Columbia, concentrating the remaining locations mainly in Ontario and parts of the Prairies.
