TEMPO.CO, Jakarta - Toys R Us is preparing to close around a quarter of its 106 stores in the UK. The closures would form part of a deal to renegotiate debts owed by the company to its landlords – which must be agreed by 75 percent of its creditors.
Retail analyst Kate Harcastle, from Insight with Passion, said the challenge facing Toys R Us is a common theme of retailers. Hardcastle said costumers are most comfortable buying toys and electronics online as they offer big-name, trusted brands.
“Toy retailers, fashion retailers, everyone is going to reduce the size of their stores. It’s coming. In the coming 24 months, you will see a lot more of this sort of news,” Hardcastle said as quoted by BBC on Saturday, December 1.
Hardcastle pointed out that Toys R Us was stuck between the extensive range and lower pricing of online retail and the theatrics and free entertainment offered by toy stores such as Hamleys, Lego, and Disney Stores.
“Toys R Us does not fit into either of these market spaces”.
The company is now seeking approval from its board and US parent company to enter talks with the landlords. Specialist restructuring firm Alvarez and Marsal is understood to be drafting a company voluntary agreement (CVA) on its behalf.
Toy R Us currently has around 3,000 workers. A Toy R Us spokesperson has not yet provided comment on the CVA proceedings, shop closures, or hundreds of jobs losses.
SYAFIUL HADI | BBC
