By Chris Williamson-
Hundreds of retail jobs are facing the axed as toy chain toy chain Toys ‘R’ Us prepares to unveil plans to close a quarter of its British stores.
The move requires the approval of a 75% majority of the company’s creditors, leaving roughly 25 of its 105 British shops facing closure.
Toys ‘R’ Us employs roughly 3200 people in the UK, meaning that a decision to close a quarter of its stores would affect at least several hundred jobs.
All of the affected Toys ‘R’ Us shops will remain trading throughout the Christmas period and well into the new year, they added. Toys ‘R’ Us’s larger out-of-town stores would be disproportionately affected by the closure plan, owing to their weak performance.
Sky reporters have confirmed that the warehouse-style stores which were opened in the 1980s and 1990s, are now too big and expensive to run profitably.
A CVA is a mechanism enabling companies to organise their funding and operations while enjoying protection from their creditors.
It is not known whether Toys ‘R’ Us’s landlords and other creditors are prepared to back the proposal, but confirmation is expected next week.
It is believed that the sudden closures and job losses is related to huge losses the company has made in the last 7 and 8 years.
Accounts for the year to January show a turnover of £418m, incurring an operating loss of £0.5m.
The sudden axing of jobs is believed to be associated with a court filing by Toys ‘R’ Us’s American parent for Chapter 11 bankruptcy protection in September . Bankruptcy protection shields stricken companies from their creditors while they attempt to restructure their finances.
The proposal to close down , axe jobs and leave employees in despair is a depressing end to day for the British high street. Earlier, Royal Bank of Scotland and Thomas Cook announced that they planned to close about 300 of their branches and stores, in the process making over 700 employees become redundant.
The combined number of jobs on their way out calls for more resilience and determination by those affected employees, to quickly find other jobs to replace them. The labour market will become saturated with an overflow of applicants, and only the best will make it through.