Toys R Us bankruptcy results in 26 UK outlets being shut
London — Toys R Us plans to shut at least 26 UK stores, as the retailer goes through bankruptcy proceedings in the US
The closures, starting in the UK’s spring, will pare rents on warehouse-size stores and let the company focus on better-performing small shops and online operations, according to an e-mailed statement on Monday. The UK arm will pursue a Company Voluntary Arrangement, a type of court-led insolvency proceeding.
Warehouse stores "are too big and expensive to run in the current retail environment", UK MD Steve Knights said in the statement. "The business has been loss-making in recent years and so we need to take strong and decisive action to accelerate the transformation."
Toys R Us filed for Chapter 11 (bankruptcy) in a US court a few months ago after buckling under debt from a $7.5bn leveraged buyout in 2005 led by Bain Capital, KKR and Vornado Realty Trust. The New Jersey-based retailer, which operates in 38 countries, is also facing competition from online vendors.
The UK arm’s CVA restructuring plan must be approved by creditors in a vote scheduled for December 21. The statement did not say which stores would close or how many job losses there would be among the company’s 3,200-strong UK workforce.