UK children and babies’ toy and clothing retailer Toys ”R” Us Limited has fallen into administration after failing to attract a buyer for the business, putting around 3,000 jobs at risk.
The company, which also trades as Babies ”R” Us, today (28 February) appointed Simon Thomas and Arron Kendall of Moorfields Advisory as administrators who are now managing an “orderly wind-down” of the retailer.
Founded in 1985, Toys “R” Us is one of the UK’s largest toy retailers with over 100 stores nationwide and over 1,500 stores worldwide in 33 countries. The administration does not involve or affect the ongoing operations of the global group outside of the UK.
All stores are expected to continue trading until further notice and much of the group’s stock will be subject to clearance discounts and other special promotions.
”We will be conducting an orderly wind-down of the store portfolio over the coming weeks,” says Thomas. “‘We will make every effort to secure a buyer for all or part of the business. The newer, smaller, more interactive stores in the portfolio have been outperforming the older warehouse-style stores that were opened in the 1980s and 1990s.
”Whilst this process is likely to affect many Toys “R” Us staff, whether some or all of the stores will close remains to be decided. We have informed employees about the process this morning and will continue to keep them updated on developments. We are grateful for the commitment and hard work of employees as the business continues to trade.”
Analysts believe the demise of Toys “R” Us can be attributed to the rise of multichannel player Smyths.
The internet took away the main USP of Toys “R” Us, “which was having such a wide range (‘everything under one roof’), but its failure to react in terms of the shopping experience, pricing and its own website, is in stark contrast to the more imaginative reaction of Smyths, and to a lesser extent The Entertainer,” says Patrick O’Brien, retail research director at Global Data.
“Without a deal in sight, more closures are imminent. But it won’t be Amazon that benefits the most. According to GlobalData’s ‘How Britain Shops’ survey, frequent Toys “R” Us shoppers are more likely to shop at market leader Argos and Smyths.”