As you might remember, the UK branch of the retail chain has been facing some rough times entirely independently of the US branch's bankruptcy filing, and around a quarter of their stores in the country could be facing closure. The latest addition to that story, as reported by major UK national media, informs us that pension funds may also be in trouble. Apparently, whatever the outcome stores will not be closing until the spring, meaning that holiday shopping (and jobs) will be unaffected, but you can read more on this below.
Toys R Us UK is facing potential collapse this week with the loss of 3,200 jobs as it struggles to win the support of the state-backed Pension Protection Fund (PPF) for a planned restructure.
The PPF, the industry-funded, state-backed safety net, demanded that the troubled retailer pump about £9m into the ailing Toys R Us UK pension fund.
This is in order to gain the PPF’s support for the retailer’s planned company voluntary arrangement (CVA) procedure, which involves the closure of at least 26 loss-making stores. That deal would lead to the loss of up to 800 jobs.
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Malcolm Weir, director of restructuring and insolvency at the PPF, said the body had yet to decide how to vote: ‘‘We are seeking to fully understand the current position of the company, including its future potential, position of the US parent and the reported historic financial transactions.
“The pension scheme is already underfunded and, if we were to vote in favour of the CVA, we would need actions taken that ensure the position of the pension scheme was not going to further weaken.
“Whatever the outcome of the CVA, the pension scheme members can be reassured that they remain protected.”
