Toys R Us troubles put 3200 jobs at risk

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Toys R Us troubles put 3200 jobs at risk

According to its latest financial results, Toys R Us UK had made a turnover of £418m and loss of £0.5m in the year to January.

Toys R Us is facing an uncertain future in the United Kingdom after it was told to put £9m into its struggling pension fund by the Pension Protection Fund (PPF).

The insolvency procedure automatically pushes Toys R Us's pension fund into assessment by the PPF, giving it a key vote at the meeting and the potential to block the process.

The sources added that the decision over whether to back the CVA was a binary one for the PPF, but that if they voted against the restructuring, it would be very likely that Toys R Us would fall into administration, putting as many as 3,200 jobs at risk.

Toys R Us needs the backing of 75% of creditors, including landlords, for the CVA to go through.

But Toys R Us is not believed to have enough cash to meet the PPF demands. We are seeking to fully understand the current position of the company, including its future potential, position of the United States parent and the reported historic financial transactions.

We have yet to decide how the creditor rights will be exercised in the CVA vote.

Hundreds of jobs at Toys R Us stores in Scotland are at risk as the firm faces the prospect of collapse.

Speaking at the time, Steve Knights, managing director of the United Kingdom arm of the American chain, said large warehouse-style stores were at risk from the proposals which have been made "to meet the evolving needs of customers".

"Like many United Kingdom retailers in today's market environment, we need to transform our business so that we have a platform that can better meet customers' evolving needs".

He also assured that members of the pension scheme remain protected "whatever the outcome of the CVA". The decision to propose this CVA was a hard one, but we determined it is the best path forward to make essential changes to the business.

"But the warehouse style stores we opened in the 1980's and 1990's, while successful in the early days, are too big and expensive to run in the current retail environment".

The PPF, the industry-funded, state-backed safety net, demanded that the troubled retailer pump about £9m into the ailing Toys R Us UK pension fund.

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