Toys R Us goes into administration, putting 3,000 jobs at riskHeat Profit
Toys R Us has gone into administration putting more than 3,000 jobs at risk.
The troubled toyshop chain, which has a branch at Western Esplanade, Southampton, is facing a £15m VAT bill which it will not be able to pay without selling the business.
Rumours of the chain’s colapse in the UK have been circulating since its parent company filed for bankruptcy protection in the USA in September.
In December Toys R US agreed a rescue plan to allow it to restructure its operations, including the closure of at least 26 stores planned for this Spring.
However with poor sales over Christmas and the New Year combined the with VAT bill have forced Toy R Us into administration.
Insolvency specialists at Moorfields have begun the process of closing its British operations.
It is estimated that there is a funding shortfall of at least £25m in the company’s pension scheme.
Founded in the USA in the 1950s, Toys R Us was taken private in 2005 by a consortium that have since loaded the company with debt.
Its fall in sales have been blamed on cheaper on-line competition and the store’s image, personified by it’s Geoffrey the Giraffe branding, was criticised by industry experts as being outdated.