Toys 'R' Us overhauls UK store network
Toys 'R' Us has confirmed plans to close at least 26 UK stores, placing around 800 jobs - a quarter of its workforce – at risk. The retailer, which currently operates 84 stores, said the closures would start in spring next year and that there would be no disruption for customers over Christmas and New Year.
The board of the retailer’s UK subsidiary is planning to launch a company voluntary arrangement (CVA), which would require the approval of a 75% majority of the company's creditors. “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,” says Steve Knights, Managing Director at Toys 'R' Us UK.
“Our newer, smaller, more interactive stores are in the right shopping locations and are trading well, while our new website has generated significant growth in online and Click and Collect sales. But the warehouse-style stores we opened in the 1980s and 1990s, while successful in the early days, are too big and expensive to run in the current retail environment. The business has been loss-making in recent years and so we need to take strong and decisive action to accelerate the transformation.”
The overhaul follows the filing by Toys 'R' Us's American parent for Chapter 11 bankruptcy protection in September.