Daily Mirror (Northern Ireland)
Toys R Us in UK store cull
Troubled firm to face tough questions
TOYS R Us was left facing questions after confirming plans to shut one in three UK stores.
Frank Field, Labour chair of the Commons Work and Pensions Committee, wrote to the firm as it earmarked at least 26 closures, putting up to 800 jobs at risk.
Field wants to know what impact the shake-up would have on members of the firm’s defined benefit pension – whose deficit jumped to £18million last year – and why it was last valued a decade ago.
He also questioned why Toys R Us’s UK arm wrote off £585m in loans to a related company in the British Virgin Islands last year.
Field also wrote to the Pensions Regulator about collapsed Palmer & Harvey after reports the wholesaler had an £80m blackhole in its pension fund yet paid £70m to shareholders between 2009 and 2016. It comes as Toys R Us revealed plans to shut big stores through a so-called Company Voluntary Arrangement.
The move, which needs creditors’ backing, would see it close large stores from next spring onwards.
UK boss Steve Knights said: “The warehouse-style stores we opened in the 1980s and 1990s, while successful in the early days, are too big and expensive to run in the current retail environment.”
The 26 shops earmarked for closure include four in Scotland, two in Ireland and the rest across England and Wales, including Bolton, Bradford, Doncaster, Exeter, Leicester, Scunthorpe, Tamworth, York and Manchester Central Retail Park.
Toys R Us says it’s focusing on “newer, smaller more interactive stores”, and online.
The firm’s American owner separately filed for bankruptcy protection in September.
Accounts show sales in the UK and Ireland have slumped by a quarter since 2008, from £566m to £418m last year when it made a £500,000 operating loss.
The closure came amid a wider wave of closures on the high street.
Meanwhile, firms with big out of town stores – including Tesco, Sainsbury’s and Next – have been trying to rent space to other retailers.
Gary Grant, boss of rival chain The Entertainer, said: “It’s been a disastrous November for the industry.”