It’s not only Toys R Us in the US and Canada that has problems. The UK branch of the popular toy store chain also has issues. The good news is that the worst may be avoided, for now.
ToyNews reports that late last week Toys R US managed to avoid a collapse in the UK. The creditors of the firm approved a rescue plan for the UK branch of the retailer.
This rescue plan does have some bad news, though. For example, it features the closing of 26 Toys R Us stores in the UK. The company has a total of 26 stores in the UK.
No stores will close until at least the spring of 2018. Still, this puts about 800 jobs at risk. Toys R Us has about 3200 employees in the UK.
“The retailer’s creditors met on Thursday to vote on the rescue plan. It hinged on a resolution of the pension deficit. Toys R Us’ UK staff pension scheme has a deficit of more than £25m”, ToyNews reports.
The good news – 98% of the creditors backed the plan. This means Toys R Us will continue to trade under the CVA (company voluntary arrangement).
“The vote in favor of the CVA represents strong support for our business plan and provides us with the platform we need to transform our business so that we can better serve our customers today and long into the future”, Steve Knights, managing director of Toys R Us UK, said. All of our stores across the UK will remain open for business as normal until spring 2018. Customers can continue to shop online and there will be no changes to our returns policies or gift cards across this period”, he adds.
So, at least that’s some good news for Toys R Us. Hopefully the plan will be enough to keep things balanced. The plan features payments until 2020, so there’s still a lot of time left.