Toys 'R' Us UK, Maplin Electronics go into administration

Toys 'R' Us said Simon Thomas and Arron Kendall, partners at Moorfields Advisory Limited, are acting as joint administrators of the British division of the US retailer to oversee “an orderly wind-down of the store portfolio over the coming weeks.” Thomas said in the emailed statement that administrators will continue to seek a buyer for all or part of the business.

Maplin had failed to secure new capital amid sterling’s devaluation, a weak consumer environment and the withdrawal of credit insurance, CEO Graham Harris said in a statement.

UK retailers are struggling to cope with competition from online and the inflationary impact of a weaker pound since the UK voted to leave the European Union in 2016.

Toys 'R' Us’s UK business couldn’t meet a £15m value added tax liability due this month after failing to secure new financing, a person familiar with the matter said on Tuesday. Weak trading during the crucial Christmas shopping season thwarted the company’s plans to restructure the business in the UK through store closures and rent cuts, as agreed in December with creditors, the person said.

Toys 'R' Us started bankruptcy proceedings in the US in September as it buckled under debt that dated from a $7.5bn leveraged buyout in 2005 led by Bain Capital, KKR & Co and Vornado Realty Trust and amid increasing online competition.

Fin24 previously reported that even though Toys 'R' Us US filed for bankruptcy due to a crushing debt load, business for the South African Toys 'R' Us and Babies 'R' Us is booming.

The chain is also in discussions to offload its 85% stake in the Asian venture to Hong Kong’s billionaire Fung brothers, who own the remainder of the business, separate people familiar with the matter said on Tuesday.