Recent news from Toys ‘R’ Us has caused a drop in toy companies’ share. Toy companies Hasbro Inc (NASDAQ:$HAS) and Mattel Inc (NASDAQ:$Mattel) specifically saw a large drop stock prices.

Toys ‘R’ Us, the latest brick-and-mortar store to be challenged by the specter of online shopping,  reportedly is seeking a loan to fund its operation following a chapter 11 filing. The company is the second largest U.S. toy retailer after Amazon.com Inc, according to Lutz Muller, chief executive officer of toy retail consultancy Klosters Trading Corp.

The news of a possible bankruptcy filing comes before the 2017 holiday season — a very lucrative time for toy sellers. This trend follows the closing of the company’s flagship store in Time Square earlier this year, which many saw as a sign of danger for the toy giant.

The company, alongside Wal-Mart (NYSE:WMT) and Target (NYSE:TGT), is one of the biggest customers for both Hasbro and Mattel. Bankruptcy for Toys ‘R’ Us could prove a significant hit to Mattel, who has stated that they make sales on credit and without collateral.

Mattel’s shares dropped 5.7% to $14.95, whereas Hasbro saw a decline of 1% down to $93.90 in afternoon trading. Smaller toy companies like Jakks Pacific Inc (NASDAQ:$JAKK) also saw a significant drop, with Jakks falling 7.2% to $2.83.

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