Kirkcaldy staff await news on Toys R Us Future

Toys R Us Stock

Toys R Us Stock

Just days before Christmas, struggling United States retailer Toys R Us has announced plans to close 26 stores in the United Kingdom, putting at risk around 800 jobs.

The company's restructure comes amid a tough run-up to Christmas, traditionally the retail sector's busiest period of the year.

Retail analyst Kate Hardcastle, from Insight With Passion, said the challenge facing Toys R Us is a common theme of retailers.

There also will be no changes to return policies or gift cards, he said.

Mr Knights said the firm had instigated a company voluntary arrangement (CVA), which enables a company to agree a plan to pay the money it owes while continuing to trade.

The company has 105 shops in total, including its newer, smaller shops which the company says have been trading well.

Steve Knights, of Toys "R" Us UK, said: "All of our stores across the UK remain open for business as normal through Christmas and well into the New Year".

As it seeks to cut down on rent and move itself into profitability the company hopes to focus the business on smaller stores and online sales rather than warehouse-style mega outlets.

It now employs 3,200 people and said it would, where possible, aim to redeploy staff affected by the shop closures.

He added: 'We recognise this process will affect many of our team members and their families, so we are committed to keeping all of our staff informed throughout this process'. "Our teams will continue to play a key role in turning our business around".

Toys R Us UK said that if approved by the creditors the CVA plan would substantially reduce its rental obligations and allow the business to move to a new, viable business model.

It is unclear whether the retailer's landlords and creditors will support the CVA proposal, the same process used by BHS to exit loss-making stores during its demise.

The British business has also needed approval from its American owners, who have been going through their own bankrupcy protection procedure to refinance their debts, securing a £3bn finance deal in October.

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