Toys R Us puts 800 jobs on the line with plans to shut 26 UK stores
Toys R US has announced plans to close 26 stores across the UK, putting 800 jobs at risk.
The toy retailer said that the closures will occur throughout 2018 and cause no disruption for customers shopping through the Christmas and New Year period.
Later this month, Toys R Us will seek creditor approval for a Company Voluntary Arrangement (CVA) to reposition its real estate portfolio after its larger warehouse style stores have become too expensive to keep operational.
Steve Knights, managing director of Toys R Us UK, said: “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.
“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.
“Our newer, smaller, more interactive stores are in the right shopping locations and are trading well, while our new website has generated significant growth in online and click-and-collect sales.
“But the warehouse style stores we opened in the 1980’s and 1990’s, while successful in the early days, are too big and expensive to run in the current retail environment. The business has been lossmaking in recent years and so we need to take strong and decisive action to accelerate the transformation.”
If approved by the creditors, the CVA plan would substantially reduce Toys R Us’ rental obligations and allow the business to move to a new business model. The company intends to commence store closures in Spring 2018.
Toys R Us currently employs 3,200 people, and said that efforts will be made to redeploy team members where possible.
Mr Knights added: “We recognise this process will affect many of our team members and their families, so we are committed to keeping all of our staff informed throughout this process. Our teams will continue to play a key role in turning our business around.”