Toys “R” Us has collapsed in the UK, putting 3,000 retail jobs at risk.
The company is one of the UK’s largest toy retailers with 105 stores across the country.
After an unsuccessful search by management for a buyer for the company, an insolvency specialist — Moorfields Advisory — has been put in charge of winding down the firm, closing stores and selling off assets.
The collapse into administration follows Toys “R” Us filing for bankruptcy in the US in September under the weight of $ 5 billion in debt.
“We will be conducting an orderly wind down of the store portfolio over the coming weeks,” Simon Thomas, a Moorfields Advisory partner, said in a statement. “All stores remain open until further notice and stock will be subject to clearance and special promotions.,”
While no decision had yet been taken on how many stores would close, many Toys “R” Us staff were likely to be affected, Thomas added.
Toys “R” Us is also closing stores in the US. The company’s lawyers said last month that the decision to shut stores in the company’s biggest market was prompted by increased competition and a shift by customers toward online shopping.
Toys “R” Us has operations in 33 countries around the world and over 1,500 stores, but most are based in the US. Moorfields said the appointment of administrators to run the UK business would not affect stores in other countries.
Consumers are increasingly shifting to online retailers like Amazon(. Toys “R” Us was fighting an uphill battle as many of their toys, baby clothes and products didn’t require customers to go into the stores to touch, feel and try them on. )
On top of that, consumers in the UK have been squeezed by a spike in inflation and stagnant wages.
“Retail sales growth was broadly flat at the beginning of the New Year with the longer term picture showing a continued slowdown in the sector. This can partly be attributed to a background of generally rising prices,” said Rhian Murphy, a senior statistician at the UK’s Office for National Statistics, earlier this month.