Toys R Us and Maplin fall into administration puts 5,500 UK jobs at risk

Government urged to hold talks with unions and retailers to protect chores as companies fail to find buyers

Toys R Us and Maplin have entered administration on the same day, putting more than 5,000 jobs at risk at two of the UK’s best-known retailers.

Administrator Moorfields said it was managing an” orderly wind-down” of Toys R Us, which has about 3,000 staff, while PwC has been appointed to oversee the administration of Maplin, which applies 2,500 people.

Labour called on the government to hold urgent talks with trade unions and the companies to ensure that jobs are safeguarded and address weakness in the retail sector.

Moorfields said it still holds out hope of procuring a last-minute buyer for all or part of Toys R Us, with its newer stores most likely to attract interest.

Simon Thomas, a partner at Moorfields, said:” All stores remain open until farther notice and stock will be subject to clearance and special promotions .”

” We’re fostering a user to redeem their gift cards and vouchers as soon as is practicable ,” he said adding that customers should do so as soon as possible, before any store closes take effect.” We will stimulate every effort to secure a buyer for all or part of the business.

” Whilst this process is likely to affect many Toys R Us faculty, 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 .”

Maplin
Maplin applies 2,500 people in the UK. Photograph: Jacob Carter/ Rex/ Shutterstock

Maplin has also been put into administration after the failure of rescue talks with billionaire Philip Day, proprietor of manner chains Edinburgh Woollen Mill, Jaeger and Peacocks.

Discussions between Day and Maplin’s private equity owner Rutland Fund Management to save a chain with 2,500 staff and 200 shops broke down on Tuesday.

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.

” During this process Maplin will continue to trade and remains open for business.

” The business has worked hard over recent months to mitigate a combination of
impacts from sterling devaluation post Brexit, a weak consumer surrounding and
the withdrawal of credit insurance.

” This necessitated an intensive search for new capital that in current market conditions has proved impossible to create. These macro factors have been the principal challenge not the Maplin brand or its market differentiation.

” We believe passionately that Maplin has a place on the high street, and that our
trust, credibility and expertise fulfills a client require that is not supported
elsewhere .”

Rebecca Long-Bailey, Labour’s shadow business secretary, said:” It’s devastating that over 5,500 high street tasks risk being lost. This latest shock in the retail sector continues a worrying trend for our shopping streets and centres.

” The government must urgently meet with both the unions and the companies to ensure that these chores are safeguarded.

” Workers are suffering stress and nervousnes not knowing what the future holds for them. In the event of job losses, the government must act quickly to ensure all workers receive swift redundancy pays and are properly supported.

” The government must also urgently address problems across the retail sector .”

Like Maplin, Toys R Us has been hunting for a buyer for several weeks, but the formal appointment of administrators was announced on Wednesday.

The 105 -store chain, founded in 1985, is a subsidiary of the eponymous US company, which filed for insolvency protection in the US and Canada last year after amassing$ 5bn( PS3. 7bn) of debt.

The brand, which operates big out-of-town stores, has struggled to keep pace with transformations in shopping habits as Britons increasingly buy toys online or in supermarket aisles.

Veteran retail analyst Nick Bubb said:” Toys R Us simply couldn’t compete with Amazon and other online retailers with its shabby and expensive’ big box’ stores. Customers won’t miss it when it’s gone .”

He said rival toy firms such as The Entertainer were weathering difficult trading condition but the change to online sales was ” overwhelming poor retailers like Toys R Us with no strong point of change in their stores .”

https://www.theguardian.com/email/form/plaintone/3887
Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

Make sure to visit: CapGeneration.com

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s