PA Wire PA Images Toys'R Us also collapsed on Wednesday putting 3,200 jobs at risk
02 March, 2018, 10:52
Administrators from Moorfields Advisory have been appointed to the United Kingdom arm of the troubled toy store chain, which has more than 100 stores nationwide.
What is administration followed by Company Voluntary Arrangement, or CVA?
But this failed to enable the business to keep going.
Efforts to find a buyer fell flat and the firm was forced to call in the administrators. The move had been expected since the weekend.
Moorfields has been appointed to begin "an orderly wind-down" of the UK's biggest toy retailer.
Labour's shadow business secretary, Rebecca Long-Bailey, has urged the Government to help Maplin and Toys R Us employees.
It said it would continue to accept gift cards already bought and announced that most remaining stock would be on promotion to assist clearance.
Toys'R'Us gift cards are still now being redeemed, but exchanges are only being offered for faulty goods. As a result, it may decide not to accept product returns.
Anyone with Toys R Us gift cards and vouchers should spend them in stores as soon as possible before the shops are closed down.
The chain has previously admitted its 1980s-style warehouse stores had become exhausted, expensive and suffered particularly from online competition.
Toys "R" Us is going into administration and 105 stores are at risk of closing down across the United Kingdom, it has been reported. Toys R Us says they be continued to be accepted but they could withdraw this at any time. "We are grateful for the commitment and hard work of employees as the business continues to trade". Otherwise, customers can use their deposits toward the cost of any in-store purchases by March 11. A company with a steady cash flow could have the potential to recover, enter a formal agreement with the creditors and continue trading.
Moorfields said that the administration did not affect the global operations of Toys R Us outside the UK.
The existing business model of Toys R Us, which is built around large warehouse sites, left it unable to cope with the changing marketplace and the challenge of the internet, according to Brian Johnson, business recovery and insolvency partner at chartered accountants H W Fisher & Company.
But it has been losing money for years as it battled competition from online stores like Amazon.
Blick Rothenberg added that for VAT bad debt relief, the amount will have had to gone unpaid for six months from the date when the invoice was due, and so may take some time to come to fruition.