The Chapter 11 bankruptcy allows the company to restructure about $5 billion in debt.
The bankruptcy filing by the company also may have global implications, especially for Chinese toy manufacturers.
If things don't change for toy retail giant Toys R Us, the days of Geoffrey the Giraffe are numbered.
Marketing manager Nicole Annells said: "While Toys "R" Us Inc, which incorporates Toys "R" Us US and Canada, evaluates the restructuring of its operations and debt and continues to deliver an outstanding customer experience, this course has no bearing on the licence territories which continue to trade as independent entities".
With its spacious, high-ceiling stores that hold thousands of items, Toys R Us pioneered the big-box format for toy sales and once was the go-to destination for people shopping for toys, baby products and birthday gifts.
The move would ensure the Canadian subsidiary of the global toy retailer - which applied for creditor protection in the US on Monday and in Canada a day later - has an uninterrupted supply of merchandise as it heads into the busy holiday shopping season.
A UBS note on Tuesday also highlighted the impact the dependency of the holiday season has had on Toys R Us.
"Toys R Us' bankruptcy is a reminder that what we are going through right now in retail is not an evolution, but a real revolution", said Roger Beahm, executive director of the Center for Retail Innovation at Wake Forest University School of Business.
"Toys "R" Us has developed a reputation for being expensive retailer for toys", Lee said.
One way for the company to adapt would be to have "interactive and experiential" stores, with more opportunities for children and parents to test and play with products. Major brands have also been funding an overhaul of Toys "R" Us stores by adding more featured areas for top brands such as Mattel's American Girl dolls.
In call with analysts in June about the company's fiscal first quarter, which ended April 29, Brandon said that the retail changes toward e-commerce "continue to create significant challenges" and that there was "very, very aggressive pricing online".
Further bolstering its prospects, Toys "R" Us's underlying business, which generated $11.5 billion in sales a year ago, remains solid.
"Will Toys R Us be around for Christmas in 2018?"
Toys "R" Us filed now because 40 percent of its vendors stopped shipping, unless they received cash on delivery.
Still, although the toy chain's US parent company may try to tap assets in Canada to pay off its creditors, it will want to avoid disruption in its Canadian subsidiary, he said. In the early 1990s, sales grew at a 10 percent annual clip; past year, they dipped 2.2 percent.