Toys R Us on verge of collapse as deadline looms
Rescue deal ‘looks increasingly unlikely’ after potential buyer walks away
Toys R Us is expected to enter administration tomorrow unless an eleventh-hour deal to rescue the ailing company is struck.
Frantic attempts to secure a buyer before Tuesday’s deadline for payment of a £15m VAT tax bill have so far failed, with a potential investor pulling out at the last minute, the Retail Gazette reports.
The crisis in the chain’s UK arm - which employs around 3,200 people - comes less than six months after its American parent company filed for bankruptcy protection in the US and Canada, and announced plans to dramatically scale back its operations.
Toys R Us UK narrowly avoided administration in December after a deal was agreed with the Pensions Protection Fund that involved cutting 800 jobs and closing at least 26 stores.
Another rescue “looks increasingly unlikely and bosses are thought to be braced for collapse”, says the Daily Mail. Insolvency specialist firm Moorfields is expected to take over the retailer’s operations.
Although the looming VAT bill is “likely to be the trigger that causes collapse, the disaster has been years in the making thanks to the rise of internet retailers”, says the newspaper.
Meanwhile, Sky News reports that Toys R Us is also seeking bids for its stores in Continental Europe, with potential buyers told to lodge their offers by the close of business today.
“It was unclear this weekend whether the European arm of Toys R Us faces a similar path towards insolvency if a sale cannot be agreed in the coming weeks,” the broadcaster says.
