It's game over for 26 loss-making Toys R Us stores

It's game over for 26 loss-making Toys R Us stores

It's game over for 26 loss-making Toys R Us stores

Toys R Us UK said that if approved by the creditors the CVA plan would substantially reduce its rental obligations and allow the business to move to a new, viable business model.

The company employs around 3,350 people with 100 stores across the United Kingdom, including branches at Birchley Island in Oldbury, at Merry Hill shopping centre, in Stafford and at Meole Brace retail park in Shrewsbury.

Toys "R" Us Inc. has begun the process of seeking creditor support to restructure its United Kingdom arm.

The retailer was loaded with debt in a buyout more than a decade ago and failed to keep consumers from abandoning its stores for the lower prices and convenience of online shopping.

The toy retailer is seeking approval from its creditors to implement its restructuring plan that could put hundreds of jobs at risk.

The future of jobs at Toys "R" Us in Dundee has been cast into doubt amid plans by the firm to close 26 stores across the United Kingdom and downsize several others.

In a statement released today, the company said that it plans to revamp its business in response to "evolving needs of customers in today's United Kingdom retail market".

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

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It made an operating loss of £500,000 on sales of £418mln for the year to January.

The company has 105 shops in total, including its newer, smaller shops which the company says have been trading well.

The Tunbridge Wells store will continue to trade as normal and will continue to honour gift cards and take-time-to-pay agreements with customers.

"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".

Mr Knights said the closures had been "a hard decision" but said the company needed to take "strong and decisive action" to try and turn around the business. It is also likely to mean redundancies among its 3,200 workforce, although the business aims to redeploy staff 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".

Retail analyst Kate Hardcastle, from Insight With Passion, said the challenge facing Toys R Us is a common theme of retailers.

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