Not Playing Around: Toys R Us UK Has Collapsed

Mar 03, 2018, 03:27
Not Playing Around: Toys R Us UK Has Collapsed

Following the failure to attract a buyer, the joint administrators say they are conducting an orderly wind-down of Toy R Us store portfolio.

The collapse of Toys R Us and Maplin sent shares in other retail stocks lower including Mothercare PLC (LON:MTC), Marks & Spencer Group PLC (LON:MKS) and Debenhams PLC (LON:DEB). Sky News reported that restaurant chain Prezzo plans to close up to a third of its 300 outlets, and thatdepartment store House of Fraser had asked landlords for rent reductions.

He added: "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".

The British arm of troubled retailer Toys'R'Us is winding down its activities, administrators said Wednesday, as the USA firm faces pressure from rival stores and online giant Amazon. Recent insolvency statistics demonstrate that this is a growing trend and failing to take notice and adapt accordingly to changing consumer behaviour could be deadly for United Kingdom retailers'.

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Insolvency firm Moorfields Advisory Limited has announced a 25 per cent discount available on all products across Toys R Us and Babies R Us and all of its stores will continue to trade until further notice.

If there's nothing wrong with the item, you may not be able to return it. Online trading stopped on the morning of Wednesday, February 28, 2018.

Eversheds previously advised Maplin - which has 217 stores across the United Kingdom and Ireland and employs more than 2,500 people - on its £85m sale to Rutland Partners in 2014.

Maplin had failed to secure new capital amid sterling's devaluation, a weak consumer environment and the withdrawal of credit insurance, CEOGraham Harris said in a statement.

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Adam Deacock, a Barrister at Radcliffe Chambers commented that finding a buyer willing to absorb the companies' debts and liabilities will be tough, and as a result "the administrators' concern is simply to produce the best result for creditors" by getting as much as possible for the assets.

"Given the cash position of the company, the directors resolved to put Maplin into administration", it said. That means Amazon, but it also means the British toy seller Smyths.

How long does going into administration last?

The process has been described by administrators as an "orderly wind-down". The company's website notes that it that it is now in administration, meaning outside parties (from Moorfields Advisory) have been appointed to wind down the company.

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When the parent company applied for bankruptcy protection, it was stated that the move would not affect the United Kingdom business. If a company is in administration, it's the appointed administrator's job to save the company money.