5,700 jobs at risk as Toys R Us and Maplin both go into administration
More than 5,700 jobs hang in the balance today after Toys R Us and Maplin both went into administratoin.
Electronics company Maplin became the second retailer on the same day to collapse into administration, putting 2,500 workers' roles at risk alongside 3,200 at Toys R Us.
Administrators from Moorfields Advisory have been appointed to the UK arm of the troubled toy store chain, which has more than 100 stores nationwide, including in Shrewsbury.
The branch at Meole Brace retail park was one of 25 stores the chain had planned to close in a bid to save the business, however the proposals announced last year failed to keep the chain going.
No decision has been made yet about store closures as the administrators try to find a buyer for the business, which has been in crisis since late last year.
After attempting to find a buyer for the business as a going concern, administrators were called in today. The move had been expected since the weekend.
PwC called in at Maplin
Meanwhile Maplin, which has stores at Telford Bridge Retail Park and in Shrewsbury town centre, has called in PwC after attempts to rescue the chain failed.
Maplin has 217 stores in the UK, and PwC is still attempting to find a buyer for the group, which is owned by private equity firm Rutland Partners.
Graham Harris, the company’s chief executive, said: “I can confirm this morning that it has not been possible to secure a solvent sale of the business and as a result we now have no alternative but to enter into an administration process.
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“During this process Maplin will continue to trade and remains open for business.”
He added that the retailer has been struggling to mitigate the impact of the pound’s devaluation post the Brexit vote, a weak consumer environment and the withdrawal of credit insurance.
Edinburgh Woollen Mill, run by retail billionaire Philip Day, had been touted as a potential rescuer for Maplin but talks are thought to have broken down, leaving Rutland no alternative but to call in administrators.
Hard times for the high street
High street chains across the board have been hit hard by falling consumer spending, soaring inflation and competition from online rivals.
In total Toys R Us employs 3,200 people in the UK at 106 stores and concessions.
Following the failure to attract a buyer, the joint administrators say they are conducting an orderly wind-down of Toy R Us store portfolio.
And they have urged any business interested in buying all or part of the company or its assets to contact them "as soon as possible".
Heavy discounts
They said all stores would continue to trade 'until further notice' while stock would be sold at clearance discounts and other promotions.
And they have urged any business interested in buying all or part of the company or its assets to contact them "as soon as possible".
Customers are being encouraged to redeem any gift cards or vouchers as soon as possible. No returns for refunds will be accepted.
Deposits paid by customers under Take Time To Pay Agreements towards larger purchases will be honoured provided that the outstanding balance is paid and the goods collected by March 11.
Alternatively, customers can use their deposits towards the cost of any in-store purchases provided that these are also completed by March 11.
Customers will no longer be able to order goods online or use the “click and collect” facility and are therefore are encouraged to go to the store where heavy discounts are likely.
All outstanding “click and collect” orders placed online will be fulfilled, subject to the stock still being available.
Running down
Toys R Us had already been in the process of running down 25 of its sites with a closing down sales having started this week and empty shelves in many of those including Shrewsbury, St Andrews Retail Park in Birmingham and Tamworth.
They were among the stores lined up for closure as part of the restructuring plan ahead of a poor Christmas and new year sales period.
The planned company voluntary arrangement, first announced days before Christmas, has now been overtaken by the administration which puts the other sites including Birchley Island at Oldbury, intu Merry Hill at Brierley Hill and Queens Retail Park, Stafford – which only opened last year – and all the jobs at risk
The Toys R Us shops with closing down sales have up to half price off everything,
Toys R Us was founded in the UK in 1985 with the opening of five stores and grew rapidly, specialising in huge out-of-town toy warehouse sites.
But it has been losing money for years as it battled competition from online stores like Amazon. It came up with a new smaller store format but not in time to save the business.
Its bankrupt United States parent is already in the process of closing hundreds of stores across the US.
