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Toys R Us bankruptcy results in 26 United Kingdom outlets being shut

Toys R Us bankruptcy results in 26 United Kingdom outlets being shut

Toys R Us UK, which is owned by its US namesake but runs as a separate financial entity, has been loss-making for about seven years.

He also pointed to a "significant growth" in online sales and its click-and-collect offering.

The troubled toy retailer announced Monday its British division is seeking to restructure its real-estate portfolio under an insolvency procedure called a company voluntary arrangement, or CVA.

In September, the American toy and juvenile-products retailer had closed on $3.1bn of financing facilities to support its operations during its financial restructuring process.

Shadow Secretary of State for Scotland Lesley Laird said: "Hundreds of workers in Scotland will now spend Christmas facing the prospect of redundancy". The statement did not say which stores would close or how many job losses there would be among the company's 3,200-strong United Kingdom workforce.

Toys R Us is to close at least 26 of its permanent United Kingdom stores, putting 800 jobs at risk.

Toys R U.S. has had a hard lead up to Christmas with sales down 10% in November.

Toys R Us, which now employs 3,200 in the United Kingdom and operates 84 stores, said it aimed to begin closing the United Kingdom stores from the spring and it would look to redeploy staff to its smaller, "more interactive" stores.

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The kids" toy retailer announced this week that it had planned the closure of a quarter of its stores across the country in response to "evolving needs of customers in today's United Kingdom retail market'.

"The decision to propose this CVA was a hard one, but we determined it is the best path forward to make essential changes to the business".

Managing director Steve Knights said the chain's "warehouse style stores", which it opened in the 1980s and 1990s, had become "too big and expensive to run in the current retail environment".

"Like many United Kingdom 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.

The company, which has made losses in the United Kingdom for seven of the last eight years, says it needs to "transform the business to meet tough United Kingdom retail market conditions".

It hopes creditors will approve the plans over the next 17 days.

Alvarez & Marsal is restructuring advisor for Toys R Us, while Kirkland & Ellis is principal legal counsel.