Toys “R” Us Inc.’s U.K. unit said it entered into administration yesterday after talks to sell the business fell through.
Simon Thomas and Arron Kendall, partners at Moorfields Advisory Limited, have been appointed as joint administrators of the British division of the U.S. retailer to oversee “an orderly wind-down of the store portfolio over the coming weeks,” the company said in an emailed statement.
Thomas said in the statement that administrators will “make every effort to secure a buyer for all or part of the business.”
“All stores remain open until further notice and stock will be subject to clearance and special promotions,” he said.
The company operates over 100 stores in the U.K., making it one of the country’s largest toy retailers.
The company couldn’t meet a 15 million-pound (USD21 million) value added tax liability due this month after failing to secure new financing, a person familiar with the matter said on Tuesday.
Weak trading during the crucial Christmas shopping season thwarted the company’s plans to restructure the business in the U.K. through store closures and rent cuts, as agreed in December with creditors, the person said.
Toys “R” Us started bankruptcy proceedings in the U.S. in September as it buckled under debt that dated from a $7.5 billion leveraged buyout in 2005 led by Bain Capital, KKR & Co. and Vornado Realty Trust and amid increasing online competition. The chain is also in discussions to offload its 85 percent stake in the Asian venture to Hong Kong’s billionaire Fung brothers, who own the remainder of the business, separate people familiar with the matter said on Tuesday. Bloomberg
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