Toys R Us store in Ipswich will remain open despite the company's US arm's struggles
PUBLISHED: 16:58 19 September 2017 | UPDATED: 16:58 19 September 2017
Toys and games retailer Toys'R'Us says it is "business as usual" for its UK stores - including in Ipswich - despite the chain's North American arm filing for bankruptcy protection in the United States and Canada.
Toys’R’Us, which has around 1,600 stores worldwide and nearly 65,000 employees, said most of its shops remained profitable and would operate “as usual” while it looks to restructure a 5.6billion US dollar (£3.6bn) debt mountain.
It also confirmed that its stores outside of North America, including the UK, Europe, Australia and a joint venture in Asia, were not affected by the so-called “Chapter 11” filing, which gives a company temporary protection from action by creditors to allow to reorganise.
The group has 110 stores in the UK, including one at the Copdock A12/A14 interchange on the edge of Ipswich, and more than 2,500 staff but it stressed that its European arm is a separate legal entity to the America business.
Dave Brandon, chairman and chief executive of Toys’R’Us, said: “We are confident that we are taking the right steps to ensure that the iconic Toys’R’Us and Babies’R’Us brands live on for many generations.”
He added: “As the holiday season approaches, our global team members are ready to serve the millions of kids and families who will be shopping with us.”
The New Jersey-based chain has secured more than 3bn US dollars (£2.2bn) in financing from a syndicate of lenders to help keep its stores open.
Mr Brandon said plans to restructure its debt pile would “provide us with greater financial flexibility to invest in our business, continue to improve the customer experience in our physical stores and online, and strengthen our competitive position in an increasingly challenging and rapidly changing retail marketplace worldwide”.
The private equity-owned company has suffered falling like-for-like sales, with analysts saying it has failed to build up its online business sufficiently and lost out to competitors such as Amazon.
The group’s history dates back to the 1950s and it arrived in the UK in 1985. It has struggled with debt since private-equity firms Bain Capital, KKR & Co and Vornado Realty Trust took it private in a 6.6bn dollar buyout in 2005. It was being lined up for a stock market flotation, but the plans were scuppered by weak financial performance.