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Toys R Us and Maplin collapse, putting thousands of jobs at risk

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Written by: The Business | Posted 28 February 2018 16:11

Toys R Us and Maplin collapse, putting thousands of jobs at risk

Another day arrives and with it another announcement about a high street retailer struggling to survive – or so it seems.

Some of the most-loved stores on the high street are facing serious questions about their future following tough trading conditions.

Toys 'R' Us and electronic goods retailer Maplin are the latest retail chains to collapse, leaving thousands at risk of losing their jobs. Both went into administration this morning, Wednesday February 28.

Toys R Us appointed administrators after scrambling - and failing - to secure a rescue deal for the company after being slapped with a £15million VAT bill.

Founded in 1985, Toys R Us is one of the UK’s largest toy retailers with more than 100 stores nationwide and over 1,500 stores worldwide in 33 countries.

Much of the stock will be subject to clearance discount, and shoppers are being warned to use gift cards now as the firm enters administration.

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The UK arm of the chain won a stay of execution when its US parent company filed for bankruptcy in December.

Up to 26 loss-making stores launched closing down sales while landlords accepted lower rent for those that stayed open.
But poor Christmas trading has been compounded by the huge VAT demand.

The firm was put up for sale earlier this month after losing money for the last seven years. It was thought it needs around £120million to make it viable.

Alteri Investors and Hilco Capital, which saved teetering HMV from total collapse in 2013, were previously said to be potential buyers.

However, despite recent discussions with Toys R Us's UK arm, they were said to have been put off by the "complexity of a deal".

Administrator Moorfields has been appointed to conduct an "orderly wind-down" of company stores, although the firm insisted it is still seeking a buyer.

Simon Thomas, Moorfields partner, said: "We will be conducting an orderly wind-down of the store portfolio over the coming weeks. All stores remain open until further notice and stock will be subject to clearance and special promotions."

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Meanwhile, Maplin has gone into administration, leaving 2,500 people at risk of losing their job.

The retailer’s owners, Rutland Fund Management, had been in talks with Edinburgh Woollen Mill, which owns companies including Peacocks and Country Casuals, but discussions collapsed and the chain has now appointed PwC to oversee the insolvency process.

Maplin, which has more than 200 stores including outlets in Brislington Retail Park, at Cribbs Causeway and on Gloucester Road, had been struggling in recent months after difficult trading conditions saw like-for-like sales fall over the festive period.

PwC says stores will remain open for the time being and the chain's website will continue to operate while the administrator searches for firms interested in buying parts of the business.

Maplin chief executive Graham Harris 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.

"We believe passionately that Maplin has a place on the high street, and that our trust, credibility and expertise meets a customer need that is not supported elsewhere.”

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