After closing 53 stores in the past two years and now facing a succession of lawsuits from unpaid suppliers and landlords, Toys “R” Us Canada has turned to an Ontario court for reprieve as it tries to chart a new future.

The toy retailer announced Tuesday that it has filed for creditor protection while it embarks on a restructuring that could see its footprint further diminished or the whole business sold to new owners. Creditor protection temporarily shields an insolvent company from having to pay those it owes money to while it figures out its next steps.

In court documents, Toys “R” Us Canada said the step was necessary because the company has struggled to cope with inflation, rising labour costs, supply chain disruptions and a shift toward e-commerce.

It laid off staff, closed unprofitable stores, negotiated with suppliers and explored other revenue streams to try to cope with the headwinds in 2023 and 2024 but the moves weren’t enough to stabilize the business.

Toys “R” Us Canada says it now owes at least $120 million to its vendors and “substantial” amounts to landlords.

While its 22 current stores remain open, the company warned it may reduce the number of locations it operates further.

Liquidating stores, furniture and equipment and developing a sales process for the remaining locations are also options, said Alvarez & Marsal, a third-party monitor set to guide the company through creditor protection, in its own court filing.

Toys “R” Us Canada is owned by a numbered company that does business as Putman Investments.

Ancaster, Ont-.based Putman Investments bought the business from Fairfax Financial Holdings Ltd. in 2021.

The company is also behind HMV, Sunrise Records, FYE, Ricki’s, Cleo and Northern Reflections. Over the holidays, it closed all of its T. Kettle stores and before that, shuttered a short-lived home goods venture called Rooms + Spaces.

Its sister company Everest Toys, started by the father of Putman Investments leader Doug Putman, was forced into receivership last year.