US-based Toys ‘R’ Us has revealed its plans to transform its business structure from next year in order to meet its consumer’s needs in the UK retail market.
As part of its transformation plan, Toys ‘R’ Us initiate a company voluntary arrangement (CVA), for which the company will take the approval from its creditor to reposition its real estate portfolio for future growth and profitability.
The retailer noted that it has submitted a complete operational restructuring plan to its creditors and will solicit their approval of this plan over the next 17 days.
If the CVA has been approved by the company’s creditors, then there could be a significant reduction in the rents, and will enable Toys ‘R’ Us to move to a new, viable business model.
The process will see closure of nearly 26 stores and is expected to take place next year.
Toys ‘R’ Us currently has a workforce of nearly 3,200 people, and as part of the CVA process, the number may come down by next year.
The company further noted that there will be no disruption for customers shopping during the Christmas and New Year period.
Toys ‘R’ Us UK managing director Steve Knights said: “All of our stores across the UK remain open for business as normal through Christmas and well into the New Year. Customers can also continue to shop online and there will be no changes to our returns policies or gift cards across this period.
“Like many UK retailers in today’s market environment, we need to transform our business so that we have a platform that can better meet customers’ evolving needs. The decision to propose this CVA was a difficult one, but we determined it is the best path forward to make essential changes to the business.”