Up to 800 jobs under threat as Toys R Us confirms plan to close one in three UK stores
PUBLISHED: 12:06 04 December 2017 | UPDATED: 09:56 05 December 2017
Toys R Us has put forward plans to close at least a third of its UK stores, putting up to 800 jobs at risk.
United States-owned toys and games retailer Toys R Us has put forward plans to close at least a third of its UK stores, putting up to 800 jobs at risk.
Toys R Us says it is working on a Company Voluntary Arrangement (CVA), which would allow it to jettison 26 loss-making stores as part of a transformation plan to “meet the evolving needs of customers in today’s UK retail market”.
It is understood that 500 to 800 jobs could be lost as part of the CVA process, as the company expects that it will be required to make redundancies, although it says all efforts will be made to redeploy staff where possible.
Toys R Us trades from 84 stores in the UK, plus 21 concessions, and employs a total of 3,200 people. It says there will be “no disruption for customers” during the Christmas and New Year shopping period, with the first closures not taking place until spring 2018.
Toys R Us has two stores in East Anglia, in Norwich and Ipswich, but has declined to say how individual branches may be affected by the announcement.
Steve Knights, managing director of Toys R Us UK, said the warehouse-style stores opened in the 1980s and 1990s were now “too big and expensive to run”.
However, Mr Knights said that “newer, smaller, more interactive stores” were trading well, and he also pointed to a “significant growth” in online sales and its click-and-collect offering.
“Like many UK retailers in today’s market environment, we need to transform our business so that we have a platform that can better meet customers’ evolving needs,” he said.
“The decision to propose this CVA was a difficult one, but we determined it is the best path forward to make essential changes to the business.”
As part of the CVA process, Toys R Us UK has submitted its restructuring plan to creditors, with hopes of gaining approval within the next 17 days.
If approved, Toys R Us UK would see its rental obligations “substantially reduce”, and allow it to move forward with a “new, viable business model” that would include a raft of store closures.
The announcement comes just months after the retailer filed for bankruptcy protection in the US and Canada as it battled mammoth debts and increasing competition online.