Toys R Us UK to enter administration – 3,200 jobs at risk

Toys R Us will enter administration early next week, with 3,200 jobs at risk, as no buyer has come forward.

Weak Christmas trading for Toys R Us meant that the original rescue plan was thrown into doubt, with the UK arm of the retailer needing to pay a £15 million VAT bill on Tuesday. Short of a last minute buyer entering the picture, an administrator will be appointed, putting 3,200 jobs in jeopardy.

Sky News reports that Toys R Us directors met with the Pension Protection Fund to advise that administration proceedings were being undertaken. Although a rescue deal coming forward before Tuesday is possible, it is considered very unlikely.

Moorfields, a corporate recovery specialist which worked on the administration of the DVD rental chain Blockbuster five years ago, is said to have been put on standby to oversee Toys R Us’s potential insolvency.

Alteri Investors, an acquirer of distressed retailers, and Hilco Capital, which salvaged the music chain HMV in 2013, have both held talks with Toys R Us UK in the last fortnight but have baulked at the complexity of a deal.

The end of the road for Toys R Us has arrived just months after a rescue package was agreed, that would have seen hundreds of store closures but kept the retailer alive.

Problems for the US Toys R Us business continue, with further store closures planned in North America.

Graham

Graham is the Editor of BrickFanatics.com, with plenty of experience working on LEGO related projects. He has contributed to various websites and publications on topics including niche hobbies, the toy industry and education. If you would like to get involved with Brick Fanatics, as a builder, writer or photographer – then please contact Graham at [email protected]

Graham

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