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As a raft of UK Toys R Us closures were announced, management moved to reassure customers it is business as usual, globally.
With the Toys R Us US parent trading under Chapter 11 bankruptcy protection, the company is moving to restructure the business globally. The UK division has initiated a process by which it is seeking creditor approval to “reposition its real estate portfolio for future growth and profitability”. That would lead to 26 stores closing, equal to about a quarter of its retail network in the market.
Toys R Us head office has issued a statement assuring customers the UK Company Voluntary Arrangement (CVA) process will not impact any Toys R Us entities or stakeholders outside the UK, including employees, vendors and customers.
“The company’s approximately 1600 Toys R Us and Babies R Us stores around the world, including all stores in the UK, are currently open for business and continuing to operate as usual. Customers can also continue to shop for the toy and baby products they are looking for online.”
Toys R Us in Asia, a joint venture with the Fung Group, continues to trade unaffected by the US company’s problems. A partial float of the Asian business is being discussed as a means of reducing the parent company’s debt.
Dave Brandon, chairman and CEO of Toys R Us, said the closure of stores in the UK would “put our UK operation on stronger financial footing”.
“Through the CVA process, we hope to receive authorisation to restructure our UK lease obligations so that we will be better able to invest in our UK business and further improve the customer experience. Importantly, our stores and operations in our other global markets will not be impacted by this process.
“We are confident that we are taking the right steps to ensure that the iconic Toys R Us and Babies R Us brands live on for many generations in the UK and around the world. We remain committed to championing play for kids and serving as a trusted resource and friend for parents around the world. Today’s proactive measure better positions us to achieve these goals and ensures customers can continue to shop us with confidence over the Holiday season and beyond.”
Under the UK CVA process, Toys R Us UK has submitted a restructuring plan to its creditors and will solicit their approval of this plan over the next 14 days. It will need approval by 75 per cent of the creditors to proceed