HEARTBREAK ON THE HIGH STREET
Toys R Us and Maplin go bust with 5,700 jobs at risk Experts predict 20,000 shops to shut in two years Up to 200,000 workers facing axe by end of 2019
THOUSANDS of workers were facing the axe last night as two retail giants went bust in a day of carnage on the high street.
Toys R Us and Maplin’s potential closures have put 5,700 staff at risk.
And experts warn about 20,000 stores could be shut by 2020 with up to 200,000 more jobs lost.
The Centre for Retail Research said: “The industry is in crisis.”
BRITAIN’S high street stores face a dire future as experts warn the latest casualties mark the beginning of a retailing apocalypse.
Up to 200,000 stores jobs are expected to be axed by 2020 according to The Centre for Retail Research – on top of 150,000 that have gone since 2016.
And it gloomily predicts 9,500 shops will close this year and 10,200 in 2019.
The shock prediction came after Maplin and Toys R Us went bust yesterday, leaving around 5,700 workers facing redundancy.
And there was more bad news as Prezzo was said to be looking to close up to 100 of its restaurants.
All three chains are owned by private equity firms.
Fashion house New Look could shut at least 60 stores, House of Fraser has asked shop landlords for rent reduction and Mothercare and Debenhams are struggling.
Up to 40 Homebase DIY stores could close, with 2,000 jobs at risk.
GlobalData retail analyst Eleanor Parr said: “Today is Black Wednesday for high street retailers.” Eleven have already gone into administration this year alone thanks to poor sales, soaring business rates and the boom in cheaper online goods. Professor Joshua Bamfield of the Centre for Retail Research called on the Government to step in and help.
He warned that one in 10 of all shops across the UK could shut over the next two years.
He said: “The retail industry is in crisis, caused by slack demand and escalating business rates.
“The Government must act now to protect the range of large and small shops by freezing rates at the very minimum. If not, then thousands of jobs and stores are forced to close.”
Shadow Business Secretary Rebecca Long-Bailey added: “The Government must urgently address the retail sector problems.”
The collapse of Toys R Us, with the possible loss of 3,200 jobs, comes just two months after the chain was saved in a last-ditch deal before Christmas.
It was floored by weak trading and debts, thought to include a £15million VAT bill that was due on Tuesday.
Joint administrator Moorfields said: “We will be conducting an orderly wind-down of the store portfolio over the coming weeks.
“All stores remain open until further notice and stock will be subject to clearance and special
The industry is now in crisis, caused by slack demand and rising rates PROF JOSHUA BAMFIELD CENTRE FOR RETAIL RESEARCH
promotions. We’re encouraging customers to redeem gift cards and vouchers as soon as possible.
“We will make every effort to secure a buyer for all or part of the business.” Members of the firm’s defined benefit pension scheme could have retirement pots cut.
The scheme is expected to end up in the Pension Protection Fund, a fall-back when it looks like businesses will fail. The European arm of Toys R Us is also struggling and its US parent company was put into bankruptcy protection last year.
Officials were also trying to find a buyer for gadget chain Maplin, which went into administration, after recent rescue attempts failed – putting 2,500 jobs at risk.
It went bust within two hours of Toys R Us. The Rotherham-based firm, owned by private equity firm Rutland Partners, has 218 stores
Chief executive Graham Harris said: “It has not been possible to secure a solvent sale and as a result we now have no alternative but to enter into an administration process. During this process Maplin will continue to trade and remains open for business.”
Edinburgh Woollen Mill, run by retail billionaire Philip Day, had been touted as a potential rescuer for Maplin.
But talks are thought to have broken down. Rutland bought the store in mid-2014, since when the chain has paid £155million in dividends.
Maplin’s losses widened from £2million to £3.8million last year – yet accounts show its highest paid director pocketed £484,000. Italian-themed chain Prezzo, which has 300 outlets and 4,500 staff, is owned by TPG Capital.
The firm is to launch a Company Voluntary Arrangement, which will allow it to ditch unprofitable branches and secure rent reductions on the remaining ones.
It also owns popular Tex-Mex chain Chimichanga.
Rival burger chain Byron and Jamie’s Italian are also closing a wave of restaurants to cut costs.
A botched revamp of Homebase led to mounting losses and the firm’s Australian owner plans to wield the axe. Figures out today reveal a near 7% slump in people going to stores, apart from supermarkets, last month.
It marked the tenth consecutive month of year-on-year falls. Dr Tim Denison of the research authors Ipsos Retail Performance said: “The squeeze on consumer revenue remains palpable, making trading increasingly brutal.”