Toys "R" Us is considering combining as many as 200 of its top-performing U.S. stores with its Canadian operations, but Selbst said that would be complicated, expressing doubt it will fly.

But Toys "R" Us got a new lease on life last year thanks to Macy's partnership, when the two companies agreed to sell toys on Macy's website and opened shops-within-shops at 400 department stores.

Toys "R" Us in its bankruptcy filing said the company "would have needed to slash prices to maintain traffic into its stores." "It's a limbo contest here," O'Shea added.