The collapse of the UK arm of toy giant, Toys R Us, has put the livelihoods of 3,000 workers at risk.
The firm went into administration on Wednesday and although the 105 stores will remain open until further notice, there are fears that it could mean the closure of some or all of them.
The administrators were called in following the failure of Toys R Us to secure a buyer for its nationwide brand. This came in the wake of the organisation’s US owner filing for bankruptcy protection last autumn.
The UK arm managed to fend off an initial threat of administration in December, when a deal was struck to inject £9.8 million into its pension fund over the course of three years. There is currently a shortfall of £38 million, which, in light of administration procedures, will be transferred to the Pension Protection Fund (PFF).
Specific reasons for the collapse of Toys R Us are open to debate, but the failure to keep up with modern trends, the role of the internet and pricing out by other retailers, such as The Entertainer, have all been suggested.
Poor sales, along with a £15 million VAT bill, are other contributing factors.
Simon Thomas, a joint administrator for the Toys R Us brand, said: “The newer, smaller, more interactive stores in the portfolio have been outperforming the older warehouse-style stores. We will make every effort to secure a buyer for all or part of the business.”
If your business runs the risk of administration, speak to Gibson Hewitt. Contact our Business Recovery department today.
