Toys R Us is reportedly planning to close up to 200 of its US outlets which, alongside previously announced closures, would comprise half of its store estate.

The beleaguered retailer is understood to be planning substantial job cuts in the US in the wake of poor Christmas trading, according to The Wall Street Journal.

The potential closure of an additional 200 stores comes shortly after the toy retailer won bankruptcy court approval to close 182 of its outlets earlier this month.

Although sources close to the situation said that the exact number of store closures may change, it is likely that Toys R Us will end up shutting 400 of the 800-strong US store estate that it operated prior to declaring bankruptcy in September.

According to internal documents seen by The Wall Street Journal, the retailer has also withdrawn redundancy pay deals for some staff working in the impacted stores.

Toys R Us is also at risk of breaching a covenant with a group of lenders led by J.P. Morgan Chase after poor Christmas trading put the firm at risk of having insufficient cash to satisfy the terms of the loan, CNBC reported.  

If the US division of the retailer is unable to keep to the terms of its $3.1bn loan, the consortium of lenders could demand immediate and total repayment, which could put the business into liquidation.

However, a spokeswoman for the business, Amy Von Walter, said Toys R Us has “not breached any covenants” and reports that state otherwise are “full of speculation”.

Meanwhile, its subsidiary business in the UK is urgently seeking funding and has appealed to its investors for a financial lifeline ahead of payment deadlines at the end of this month.