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Toys R Us has officially entered administration. Moorfields has been appointed as administrators for the brand, with stores continuing to trade until further notice.
Simon Thomas and Arron Kendall, partners in Moorfields Advisory Limited, have today, been appointed as Joint Administrators to Toys R Us Limited. Simon Thomas and Arron Kendall have also been appointed as Joint Administrators of Toys R Us Holdings Limited.
The chain will now begin preparations to close its 106 stores in the UK with estimated job losses at over 3000. The firm has been crippled by debts and most recently failed to pay its £15m tax bill, after searches for a buyer had fallen through.
Customers are being encouraged to redeem any gift cards as soon as possible, with stock soon to be entering clearance.
Simon Thomas, joint administrator and partner at Moorfields, said: “We will be conducting an orderly wind-down of the store portfolio over the coming weeks. All stores remain open until further notice and stock will be subject to clearance and special promotions. We’re encouraging customers to redeem their gift cards and vouchers as soon as possible.
“We will make every effort to secure a buyer for all or part of the business. The newer, smaller, more interactive stores in the portfolio have been outperforming the older warehouse-style stores that were opened in the 1980’s and 1990’s.
“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. We have informed employees about the process this morning and will continue to keep them updated on developments. We are grateful for the commitment and hard work of employees as the business continues to trade.”
A combination of factors has led to this outcome for the troubled retailer. The continued market dominance of online retailers has dealt a blow to warehouse-style shops, with competitively-positioned stores in city centres consuming the rest of the market share for physical retail.
With Toys R Us’ insolvency, 3200 jobs now hang in the balance, with all 106 UK stores set to close.
For more news from the Toy Industry read Toy News.
