Multiple Toys R Us Branches Close All Over U.S.; Company's U.K. Arm Goes Into Administration
Toys R Us, once considered the definite place for buying toys and related products for children, is now in administration over in the U.K. A spate of store closures in the U.S. combined with tough trading conditions have forced administrators to put the U.K. arm of the retail chain into creditor protection.
It's a status that's been described as "an orderly wind-down" for what was once the biggest toy retail chain in the U.K., according to BBC. The regional arm of the business has not secured a buyer and has fallen into this form of oversight as a way to protect its creditors.
Around 3,000 jobs are now at risk of disappearing at any time, although administrators mention that all 105 Toys R Us stores will still remain open, at least until final word for their closure comes down.
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"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," Joint administrator Simon Thomas said.
The main Toys R Us parent company in the U.S. has filed for bankruptcy earlier in September 2017, leaving its U.K. arm at the mercy of its $20.8 million debt it owes in Value Added Tax, aside from its other obligations. The retail chain's recent performance over the holidays made it unlikely that it will be able to pay off the debt.
Over in the U.S., Toys R Us have been planning to close about 180 of their locations across the country in an attempt to restructure its costs and hopefully emerge from bankruptcy, as CNBC reported in January.
Before the U.K. part of Toys R Us went into administration, the company was planning to follow suit by closing at least 26 of their costliest stores by the spring of this year as well.
