- Struggling firm is reportedly scrambling to find a buyer before the deadline hits
- Toys R Us’s sales were squeezed over this year’s crucial Christmas sales period
- Moorfields Corporate Recovery is said to be waiting in the wings if it collapses
Toys R Us UK could plunge into administration tomorrow if the struggling firm fails to pay a £15 million tax bill.
The toy seller is reportedly scrambling to find a buyer before hitting the payment deadline on a hefty VAT bill.
Moorfields Corporate Recovery has been lined up to deal with the company if it collapses.
Toys R Us UK is reportedly scrambling to find a buyer before hitting the payment deadline on a hefty VAT bill
Toys R Us, which employs around 3,200 staff in the UK, is understood to have struggled with cash flow pressures after sales were squeezed by worse-than-expected trading over the crucial Christmas period.
It comes after the beleaguered firm announced a Company Voluntary Arrangement, which allows debt to be paid back over a fixed period, at the end of last year.
This move was intended to shore up the company’s financial position by allowing it to shut loss-making stores and secure substantial discounts on rental costs.
The restructuring plan won the approval of 98 per cent of Toys R Us’s creditors in December, and had the backing of the Pension Protection Fund (PFF).
The move would see at least 26 loss-making UK stores shut and spark the loss of up to 800 jobs.
The PPF had earlier refused to back the retailer’s plans, but concessions from the company, including an offer to reduce its deficit recovery plan to 10 years from 15 years, meant the deal finally received its blessing.
In total, Toys R Us has agreed to pay £9.8 million into the pension plan, made up of £3.8 million in 2018 and £6 million over 2019 and 2020.
Moorfields declined to comment.