Toys R Us likely to close Belfast and Derry stores

Stores in the North are likely to be casualties of Toys R Us plans to close 26 stores in Britain and the North as part of its bankruptcy restructuring in the US.

The firm said its stores in Belfast and Derry will “likely” close in the spring of 2018 but that it intended to keep open its stores in Sprucefield in Co Down and Belfast Castle Court.

In relation to Sprucefield and Belfast Castle Court, Toys R Us said it was “reviewing options including downsizing the stores or rent reductions”.

The 26 closures, starting next spring, will pare rents on warehouse-size stores and let the company focus on better-performing small shops and online operations.

The UK arm will pursue a company voluntary arrangement (CVA), a type of court-led insolvency proceeding.

Warehouse stores “are too big and expensive to run in the current retail environment”, UK managing director Steve Knights said.

“The business has been loss-making in recent years and so we need to take strong and decisive action to accelerate the transformation,” he added.

Toys R Us filed for Chapter 11 in a US court a few months ago after buckling under debt from a $7.5bn (€6.3bn) leveraged buyout in 2005 led by Bain Capital, KKR and Vornado Realty Trust.

The New Jersey-based retailer, which operates in 38 countries, is also facing competition from online vendors. The UK arm’s CVA restructuring plan must be approved by creditors in a vote scheduled for December 21.

It said: “The business currently employs 3,200 people and, as part of the CVA process, it anticipates a requirement to make redundancies. All efforts will be made to redeploy team members where possible.”

Further reports: Bloomberg


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