Toy suppliers have discontinued deliveries to the United Kingdom arm of Toys R Us over concerns regarding the financial struggles of its American parent company that could leave them out of pocket.
Despite Toys R Us asserting last month that it was “business as usual” for its operations in the United Kingdom, reporters have discovered that numerous suppliers have cut off the toy chain ahead of the crucial Christmas trading season.
Sources stated that Worlds Apart, which produces doll houses and Disney Frozen bedroom furniture under licence, has discontinued supplying Toys R US because it cannot obtain credit insurance.
Meanwhile, Tutti Bambini, which produces high-end nursery furniture, has also pulled out its supply referring to financial concerns about the company. Toys R Us, which employs 2,500 staff and has 110 shops in the United Kingdom, currently lists both products of the companies as “unavailable” despite them being available at rivals Smyths, Argos, and Mothercare.
A spokesperson from Toys R’ Us confirmed that Tutti Bambini and Worlds Apart were “part of a small number of vendors currently not supplying us.”
However, the spokesperson added: “The overwhelming majority of our vendors are back online and shipping and we continue to work through the small number of others to ensure that our customers can shop with confidence.” The toy chain still plans to open four new shops in the United Kingdom this year.
Last month, Toys R Us filed for bankruptcy protection in the United States after the retailer was affected by $5bn (£3.76bn) of debt, which demanded $400m annual interest payments. The financial burden has limited its ability to invest online, which has indicated that it has slipped far behind Amazon and supermarkets which have also joined in an intense price war.
Online sales make up $12bn of the global toy market compared to $3bn ten years ago.
Toys R Us is remaining to operate in bankruptcy protection because of a $3bn financing facility, which is meant to guarantee suppliers that they will be paid in full for their Christmas stock.