TOYS ‘ BUST

Chain files for US bankruptcy with £3bn debts

A DARK cloud looms over Toys R Us after bosses filed for bankruptcy protection in the US and Canada.

The world’s largest toy store chain has run up crippling debts of £3.6billion following a brutal price war and fierce competition from online rivals.

Its shops in Britain are not affected by the restructuring but experts have warned that customers here could be worried by the development.

Retail analyst Clive Black, from Shore Capital, said that though it would not harm the running of UK stores, the bankruptcy in the US was still a “very high profile” issue.

He added: “It is far from helpful when it comes to brand reputation and attracting shoppers, especially for bigger ticket items that will be coming into the minds of mums and dads ahead of Christmas.”

The chain has 110 stores and more than 2,500 staff across the UK and there are plans to open

four new shops in Britain before Christmas. The company said: “It is business as usual for the UK subsidiary of Toys R Us.”

The US bankruptcy code gives the chain, based in the US state of New Jersey, breathing space to work out its finances and plan a way forward.

It has struggled with debt since a £4.9billion buyout by private equity firms in 2005.