Toys R Us is likely to go into administration as it has been unable to pay its £15m VAT bill and the no last minute investors have come forward with fresh capital.
Officials from the Pension Protection Fund (PPF), Toys R Us UK's biggest unsecured creditor, were notified late last week of the impending insolvency amid fading hopes of a rescue deal.
Toys R Us UK trades from more than 100 stores, and only made it through the Christmas period after a company voluntary arrangement was agreed with with its landlords to try and ease cashflow.
It is not really surprising that Toys R Us has suffered as children almost buy their own toys on their parent's Ipads these days! Online sales have increased 30% in this last year alone. Also as Toys R Us sell well known brands like Barbie and Lego these are easily found online.
RBS has also announced its closure of a quarter of its retail estate as banking shifts online as well.
Toys 'R' Us's UK operations are understood to have been loss-making in seven of the last eight financial years.
Accounts for the year to January show turnover of £418m, on which it made an operating loss of £0.5m.
Watch the video below to find out your rights as an employee of Toys R Us
Categories: Retail, What is administration