Toys R Us Expected to Collapse into Administration Tomorrow

Photo by Mike Mozart/Flickr

Tomorrow, Toys R Us is expected to collapse into administration after its failure to find a buyer for the UK company.

The toy retailer employs approximately 3,000 people in the United Kingdom. It has lined up Moorfields to handle the administration process.

The global restructuring of Toys R Us was being managed by Alvarez & Marsal. However, some sources said that it could not carry out the administration in the United Kingdom because of a conflict of interest. It would not be appropriate for Alverez & Marsal, which has been attempting to maintain the standing of Toys R Us globally, to then profit from the collapse of the company in the United Kingdom.

Toys R Us operates over 230 shops in 10 countries in Europe. The toy company has been looking for a buyer for the European business, even though a suitor has not yet been confirmed.

In the United Kingdom, Toys R Us has a VAT bill due amounting to £15m. The company has not been able to look for a buyer. The retailer has a huge portfolio of out-of-town stores and had a difficult time to keep pace with Amazon as more shoppers opt to purchase their toys online.