Dec 21, 2017
Last-minute deal saves Toys R Us UK from administration
The UK business of Toys R Us has reached an eleventh hour deal with its largest creditor to avoid falling into administration and risking 3,200 jobs. It had threatened to block the retailer's proposed Company Voluntary Arrangement - a sweeping restructuring plan that includes the proposed closure of at least a quarter of its 105 UK stores with the potential loss of up to 800 jobs - if Toys R Us UK did not agree to make the payment. The deal also includes a reduction in the duration of its pension deficit recovery plan - from 15 years to 10 years - and Toys R Us UK has agreed to seek additional support from its US parent company for the scheme. Toys R Us UK has previously said it did not have the resources to pay the full £9m originally demanded upfront by the PPF, while its parent company argued it was unable to do so under the terms of its own court-led US bankruptcy process. "We are pleased to have secured the support of our creditors and will be working closely with them in the months ahead," said Steve Knights, managing director of Toys R Us UK. "The vote in favour of the CVA represents strong support for our business plan and provides us with the platform we need to transform our business so that we can better serve our customers today and long into the future. All of our stores across the UK will remain open for business as normal until spring 2018.".
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