Toys R Us UK rescue to cost at least £120m as debt deadlines close in

February 17, 2018 No Comments

Toys R Us UK is calling for a £120 million rescue payment from potential investors to avoid liquidation as the race to save it intensifies.

The embattled toy retailer, which has recently been scrambling to find a buyer, said it needed a £50 million cash injection immediately to pay off debt owed to banks by the end of the month.

According to The Sunday Telegraph, a further £70 million would be required in the first year in order to fund its turnaround plan, including a renovation of its store estate and a pricing review.

After its US counterpart filed for bankruptcy protection late last year, it has sought to offload its UK arm before payment deadlines force insolvency.

This comes after it secured a company voluntary agreement (CVA) in which it planned to shut 26 of its loss-making stores and cut around 800 jobs.

It is understood that prospective buyers have been told it may seek to further reduce floor space in its remaining stores by more than a third, while slashing around a fifth of its staff and reducing stock ranges by a 10th.

Last week, it was revealed that turnaround specialist Hilco Capital, which rescued HMV from collapse, was considering a purchase.

However, some are now understood to be deterred by the company’s high upfront cost and unpromising business model.


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