Hundreds of jobs at risk as Toys R Us announces plans to close 26 stores

Toys R Us has put forward plans to close at least a third of its UK stores, putting up to 800 jobs at risk.

Monday, 4th December 2017, 10:22 am
Updated Tuesday, 12th December 2017, 12:27 am
Toys R Us is planning to axe up to 800 jobs.

The retailer said it is working on a company voluntary agreement (CVA), which would allow it to jettison 26 loss-making stores.

The firm said the transformation plan is needed to "meet the evolving needs of customers in today's UK retail market".

Toys R Us has branches in The Bridges, Sunderland, the Metro Centre, Gateshead, and Teesside Retail Park, near Stockton, although the identity of affected stores has still to be revealed.

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Management are believed to be speaking to staff individually before the list is announced publicly.

It is understood that 500 to 800 jobs could be lost as part of the CVA process, as the company expects that it will be required to make redundancies.

The retailer said that all efforts will be made to redeploy team members where possible.

Toys R Us, which trades from 84 stores in the UK and has 21 concessions, employs a total of 3,200 people, but the company assured that there will be "no disruption for customers" throughout the Christmas and New Year shopping period, with the business set to start closing stores in Spring 2018.

Steve Knights, managing director of Toys R Us UK, said the warehouse-style stores opened by the retailer in the 1980s and 1990s have proven "too big and expensive to run", adding that "newer, smaller, more interactive stores in the right shopping locations" were trading well.

He also pointed to a "significant growth" in online sales and its click-and-collect offering.

"Like many UK retailers in today's market environment, we need to transform our business so that we have a platform that can better meet customers' evolving needs.

"The decision to propose this CVA was a difficult one, but we determined it is the best path forward to make essential changes to the business," Mr Knights said.

As part of the CVA process, Toys R Us UK has submitted its restructuring plan to creditors, with hopes of gaining approval within the next 17 days.

If approved, Toys R Us UK would see its rental obligations "substantially reduce", and allow it to move forward with a "new, viable business model" that would include a raft of store closures.

The announcement comes just months after the US-based retailer filed for bankruptcy protection in the US and Canada as it battled mammoth debts and increasing competition online.