Toys R Us to shrink UK footprint by a quarter in face of mounting losses
Should the dramatic contraction win approval from 75% of its creditors the move would jeopardise some 25 of the chain’s 105 British outlets, potentially leaving hundreds of jobs hanging in the balance.
Toys R US UK is expected to go public on a Company Voluntary Arrangement (CVA) later this week as it is squeezed between rising costs and falling sales at its bricks and mortar stores, particularly larger out-of-town shops.
Toys R Us to shrink footprint by a quarter in face of mounting losses
According to Sky News insolvency adviser Alvarez and Marshall has been appointed to take charge of the CVA process although the business will continue to operate as normal through the important Christmas and New Year period.
Toys R Us UK has been struggling financially for some time with the business believed to have reported a loss in seven of the past eight years, most recently with a £500k operating loss in the 12 months to January despite sales of £418m.
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Toys R Us filed filed for Chapter 11 bankruptcy protection in September but that hasn't stopped brand ambassador Geoffrey the Giraffe from hitting TV screens to drum up consumer interest in its Christmas campaign.