Toys R Us said in a U.S Bankruptcy Court filing early Thursday that it must liquidate.
The move is likely to either close or sell all of its 800 stores across the U.S.
Toys R Us had already begun liquidating about 180 stores, under both the Toys R Us and Babies R Us brands, as part of its restructuring efforts to revive the business.
The retailer filed for bankruptcy protection last September, while down by nearly $8 billion in debt.
Toys R Us had initially hoped to be able to keep 400 stores open, but realized it didn’t have enough cash to preserve that many.
Market experts said, “even during recent store closeouts, Toys R Us failed to create any sense of excitement. The brand lost relevance, customers and ultimately sales.”
The chain, based in Wayne, N.J., said it has enough money left to pay its 33,000 workers for “no fewer than 60 days.”