Toys R Us UK faces collapse with loss of all 3,200 jobs
Pension Protection Fund’s refusal to back restructuring unless retailer pays £9m into fund could push chain into administration
Tuesday 19 December 2017 07.38 GMT
First published on Monday 18 December 2017 18.47 GMT
Toys R Us UK is facing potential collapse this week with the loss of 3,200 jobs as it struggles to win the support of the state-backed Pension Protection Fund (PPF) for a planned restructure.
The PPF, the industry-funded, state-backed safety net, demanded that the troubled retailer pump about £9m into the ailing Toys R Us UK pension fund.
This is in order to gain the PPF’s support for the retailer’s planned company voluntary arrangement (CVA) procedure, which involves the closure of at least 26 loss-making stores. That deal would lead to the loss of up to 800 jobs.
The insolvency procedure automatically pushes Toys R Us’s pension fund into assessment by the PPF, giving it a key vote at the meeting and the potential to block the process.
If the CVA does not go ahead, sources close to the company said it was likely to fall into administration with the potential closure of all 84 permanent stores and about 20 more pop-ups, putting all 3,200 UK staff at risk of redundancy.