Toys R Us could go bust as soon as today, leaving the Pension Protection Fund facing a £37million bill.
Britain’s largest speciality toy retailer is on the brink of administration, throwing the future of its 105 stores and 3,200 employees into further doubt.
The company, saved from collapse just weeks before Christmas, has been scrambling to find £15million to fund a VAT bill due to the taxman today.
Game over? Britain’s largest speciality toy retailer is on the brink of administration, throwing the future of its 105 stores and 3,200 employees into further doubt
It secured a lifeline in December after it agreed to pay £10million into its £18.4million pension black hole, allowing it to carry on trading through the Christmas period and close a quarter of its least profitable stores.
However, sales over the festive period are said to have been disappointing, making its financial position increasingly vulnerable.
And administrators from PwC are waiting on the sidelines, after the hunt to find a potential buyer has so far proved unsuccessful.
It is also understood to have placed recovery specialist Moorfields on standby. The firm handled the administration of DVD rental chain Blockbuster five years ago.
Should Toys R Us go into administration, The Pension Protection Fund, the lifeboat for failed firms, is expected to be left nursing a £37million bill as it takes on the firm’s pension liabilities.
It comes as 2,500 jobs hang in the balance at consumer electronics chain Maplin.
It has been in talks with the owner of Edinburgh Woollen Mill over a possible rescue deal.
But the discussions between Maplin and Philip Day, who also owns fashion chain Peacocks, are said to have broken down last night.
Maplin is the latest firm to be hit by the rise of online shopping. Last year, major credit insurers refused to offer its suppliers vital cover for customer orders.
The protection means payments will still be made if a retailer cannot pay its bills.
A collapse of the two companies could see almost 6,000 retail jobs disappear from the UK’s High Streets.