Toys R Us holds last-minute talks with pensions body

Joanna Estrada
December 21, 2017

Toys R Us is locked in last-ditch talks with the Pension Protection Fund as it tries to secure support for a company restructure plan that could stave off administration and the loss of 3,200 jobs.

It has to come up with the money by Thursday in order for the PPF to agree to the retailer's restructuring plan.

Earlier this month, Toys R Us confirmed that it was set to close at least 26 stores in the United Kingdom as part of a proposed company voluntary arrangement (CVA).

If it is unable reach an agreement with the PPF over the proposed restructure it could put the firm's entire United Kingdom operation at risk, with the potential loss of 3200 jobs.

The toy company, which has 11 stores in Scotland, may fall into administration by the end of the week if it can not meet a demand to put £9m into its underfunded pension scheme.

Retail consultant Richard Hyman told the Today programme: "This is a real Catch 22 situation".

The 26 Toys "R" Us stores confirmed to close in 2018.

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The PPF is demanding that Toys R Us makes a £9million upfront payment for its defined salary staff pension scheme, which is in shortfall.

Malcolm Weir, director of restructuring and insolvency at the PPF, said: "Given the position of the company, we strongly believe seeking assurances for the pension scheme is reasonable given the deficit in the scheme and questions about the overall position of the company".

If they do not do this and subsequently don't get the CVA then they could face administration and losing all 84 of their stores in the UK.

Recent reports suggest it is considering closing between 100 and 200 stores in America.

"Whatever the outcome of the CVA, the pension scheme members can be reassured that they remain protected".

"There are stores I've been into over the last month that have really started to up their game".

Other reports by Click Lancashire

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