3,200 jobs at risk as ailing Toys R Us goes into administration
More than 3,000 jobs hang in the balance as Toys R Us went into administration today.
Administrators from Moorfields Advisory have been appointed to the UK arm of the troubled toy store chain, which has more than 100 stores nationwide.
No decision has been made yet about store closures as the administrators try to find a buyer for the business, which has been in crisis since late last year. A CVA, or company voluntary arrangement, aimed at rescuing the business at the cost of closing 25 stores this spring - including branches at Tamworth and Shrewsbury.
But this failed to enable the business to keep going. After attempting to find a buyer for the business as a going concern, administrators were called in today. The move had been expected since the weekend.
Following the failure to attract a buyer, the joint administrators say they are conducting an orderly wind-down of the company’s store portfolio. And they have urged any business interested in buying all or part of the company or its assets to contact them "as soon as possible".
In total Toys R Us employs 3,200 people in the UK at 106 stores and concessions, including branches at Oldbury and Merry Hill.
Simon Thomas and Arron Kendall, partners in Moorfields Advisory, were appointed joint administrators today. They said all stores would continue to trade 'until further notice' while stock would be sold at clearance discounts and other promotions.
Customers are being encouraged to redeem any gift cards or vouchers as soon as possible. No returns for refunds will be accepted.
Simon Thomas of Moorfields, said: “We will be conducting an orderly wind-down of the store portfolio over the coming weeks. All stores remain open until further notice and much of the stock will be subject to clearance discounts and special promotions. We’re encouraging customers to redeem their gift cards and vouchers as soon as possible.
“We will make every effort to secure a buyer for all or part of the business. The newer, smaller, more interactive stores in the portfolio have been outperforming the older warehouse-style stores that were opened in the 1980’s and 1990’s.
“Whilst this process is likely to affect many Toys R Us staff, whether some or all of the stores will close remains to be decided. We have informed employees about the process this morning and will continue to keep them updated on developments. We are grateful for the commitment and hard work of employees as the business continues to trade.”
Deposits paid by customers under Take Time To Pay Agreements towards larger purchases will be honoured provided that the outstanding balance is paid and the goods collected by March 11. Alternatively, customers can use their deposits towards the cost of any in-store purchases provided that these are also completed by March 11.
Customers will no longer be able to order goods online or use the “click and collect” facility and are therefore encouraged to attend the stores to take advantage of the many discounts that will be introduced. All outstanding “click and collect” orders placed online will be fulfilled in the ordinary course of business, subject to the stock continuing to be available.
Toys R Us had already been in the process of running down 25 of its sites with a closing down sales having started this week and empty shelves in many of those including Shrewsbury, St Andrews Retail Park in Birmingham and Tamworth.
They were among the stores lined up for closure as part of the restructuring plan ahead of a poor Christmas and new year sales period.
The planned company voluntary arrangement, first announced days before Christmas, has now been overtaken by the administration which puts the other sites including Birchley Island at Oldbury, intu Merry Hill at Brierley Hill and Queens Retail Park, Stafford – which only opened last year – and all the jobs at risk
The Toys R Us shops with closing down sales have up to half price off everything,
Toys R Us was founded in the UK in 1985 with the opening of five stores and grew rapidly, specialising in huge out-of-town toy warehouse sites. But it has been losing money for years as it battled competition from online stores like Amazon. It came up with a new smaller store format but not in time to save the business.
Its bankrupt United States parent is already in the process of closing hundreds of stores across the US.
