Basically, the company had to pay for its own buyout when private equity firms KKL, Vornado, and Bain bought the company for $6.6 billion, mostly with loans.
Because the company then had to pay off those extreme loans, they were forced to sell off their assets and property, which they leased back from the very private equity firms that now owned them.
The same thing happened more recently with Red Lobster and JoAnn Fabrics.
Blame the manufacturers, not Toy R Us. Companies can’t tell a retailer how much to price something (that’s illegal price fixing), but they can set a suggested list price, and as a general rule, companies do not sell above the list price, especially when they have aggressive cut-throat competition like Walmart, Target, and the wholesale clubs.