THE future of Toys R Us in the UK is again in doubt – just weeks after a deal to save the business was secured.
The troubled retail giant staved off the threat of administration before Christmas after reaching a deal with the UK’s pension lifeboat to plug a £9million blackhole.
As part of the firm’s Company Voluntary Agreement (CVA) agreement, it will already be closing 25 of its 106 stores across the country this spring, but it was hoped that the deal would give the business time to restructure and pay off its debts.
But according to Sky News, the company’s American bosses have begun an “urgent search for a buyer” for the business after poor Christmas trading amid pressure from online retailers.
The move again raises the prospect of the firm entering administration – as well as threaten the jobs of 3,200 UK staff members.
Back in September, the toy giant filed for bankruptcy in the US and Canada, after piling up debts totalling around five billion dollars.
It applied to the US Bankruptcy court for “Chapter 11 protection” and as part of that it plans to close around 180 US stores – 20 per cent of its total – in the next few months.
A spokesman for Toys R Us told The Sun Online: “The US business is exploring a number of options as it develops plans to exit Chapter 11.
“These conversations are confidential but I can assure you that they are acting in the best interests of employees, business partners, shareholders and lenders.”
At Christmas, the company said it large, warehouse style stores, which were opened in the 1980s and 1990s are now too big and expensive to run.
As part of the UK closures, 800 members of staff will be losing their jobs and it’s not the only big high street name to struggle.
Last year insolvency experts warned many shops were “running out of time”, with 43,677 retailers were showing signs of “significant” financial distress.
Just yesterday, Marks and Spencer announced plans to close another 14 stores as it plans to focus on food rather than its clothing and home ranges, putting 500 jobs at risk.
Fashion chain East also entered administration this week, with the potential loss of more than 300 jobs.
Toys R Us has already confirmed the stores which will be closing this spring, and has launched an everything must go sale with up to 30 per cent off selected toys.
YOUR SHOPPING RIGHTS
WITH today’s news, you may be worried about Toys R Us closing more stores. Here’s how to protect yourself:
- Pay by credit card if spending over £100. Purchases over £100 and under £30,000 are protected under Section 75 of the Consumer Credit Act if an item fails to turn up or goes bust.
- Pay by debit card. Some banks will refund customers under the ChargeBack scheme, although it’s at their discretion.
- PayPal. If you pay via PayPal then you may be covered by its Buyer Protection policy.
- Gift gards. If you have a giftcard to use, then spend it as soon as possible. When firms go bust they often stop accepting them.