The UK arm of Toys R Us will survive at least a little longer after a rescue plan for the company was agreed with creditors.
Toys R Us UK is on the brink of going into administration. A plan was put in place to try and save the company, by closing certain out of town stores. It looked as if the chain would not survive the week when the Pension Protection Fund (PPF) demanded a £9 million injection to help meet the pension deficit. During talks today, the company agreed a figure of £3.8 million with the PPF and a further £6 million over 2019 and 2020, allowing the rescue package to go forward.
The BBC reports that 98% of creditors approved the rescue deal, that will see 26 stores close in Spring 2018, with around 800 jobs at risk.
Steve Knights, managing director of Toys R Us UK, said: “The vote in favour of the CVA represents strong support for our business plan and provides us with the platform we need to transform our business so that we can better serve our customers today and long into the future.
“All of our stores across the UK will remain open for business as normal until spring 2018. Customers can continue to shop online and there will be no changes to our returns policies or gift cards across this period.”
Customers are assured that all gift cards and returns policies will be honoured over the Christmas period. LEGO fans will be relieved that one of the UK’s biggest toy retailers will, at least for the time being, continue to operate.
Toys R Us in the US is also struggling, filing figures showing a £466.5m loss in the last quarter.