Fresh uncertainty around the future of Toys R Us in the UK

Despite seemingly having managed to put together a survival package, the future of Toys R Us in the UK is in doubt once again.

Last year, both the US and UK arms of Toys R Us faced severe financial difficulties, with both on the brink of collapse. Toys R Us in the US took steps to protect the company by entering voluntary bankruptcy, while Toys R Us in the UK managed to agree a rescue plan with creditors, that would have seen the company remain open but close one quarter of stores.

Sky News has reported that the US owner of the company are looking for buyers for Toys R Us UK, after ‘poor Christmas trading’. This new information has provided no certainty, increasing the anxiety of those depending on the chain’s survival:

Sources said on Wednesday night that advisers at Alvarez & Marsal and Lazard, which are overseeing the chain’s bankruptcy protection process in the US, have sounded out potential buyers for the UK operations in recent days.

The search for another owner will raise urgent questions about the fate of Britain’s biggest toy retailer if new investment cannot be found, with administration said to be a possible outcome.

?That prospect will dismay about 2,400 workers who thought their jobs had been salvaged when a restructuring deal called a Company Voluntary Arrangement (CVA) was approved by creditors just three days before Christmas.

Anyone who visited a Toys R Us store in the UK over the Christmas shopping period will not be surprised to hear that sales were lacklustre. Many suppliers were not shipping new stock to the chain, meaning that many shelves were filled with duplicate products – typically old, unsold stock. The concern about the future of the company also had a negative impact on the public’s perception and confidence in shopping there.