Toys R Us collapses into administration but stores will continue trading
High street retailer Toys R Us has collapsed into administration.
The toy shop, which has stores at Norwich and Ipswich, had been teetering on the edge of insolvency since before Christmas when it brokered a deal to cut its debts and close 26 stores.
But poor Christmas trading combined with an £15m tax bill have finally forced the European arm of the brand over the brink.
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Administrator Moorfields has been appointed to conduct what it called an orderly wind-down of the company's store portfolio, although the firm insisted it is still seeking a buyer.
Simon Thomas, Moorfields partner, said: 'We will be conducting an orderly wind-down of the store portfolio over the coming weeks.
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'All stores remain open until further notice and stock will be subject to clearance and special promotions.
'We're encouraging customers to redeem their gift cards and vouchers as soon as possible.
'We will make every effort to secure a buyer for all or part of the business.'
All stores will continue trading until further notice and much of the stock will be subject to clearance discounts and other special promotions, Moorfields confirmed.
'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,' Mr Thomas added.
Gift cards and vouchers will be honoured while the stores continue to trade, but customers are being encouraged to redeem vouchers as soon as possible as stores may be subject to closure without notice.
No further gift cards will be sold from Wednesday.
Andy McKinnon, acting chief executive of the Pension Protection Fund said: 'While this is a disappointing outcome, it is one we protected against in our approach to the CVA in December.
'The first of the additional payments secured by us has been paid; we believe therefore that the deficit in the pension scheme is lower than it would have been if the company had entered administration in December.
'We will now be working to maximise the recovery to the scheme from the administration. Members of the Toys R Us pension scheme can be reassured that the PPF is there to protect them.'
Electronics retailer Maplin has followed Toys R Us into administration after failing to find a buyer for the business.