There was a magical place that’s now in administration. It’s called ‘Toys R Us’, Toys R Us’, Toys R Us’.
This week has seen another two major retail casualties with the aforementioned much-loved toy shop and well-known electrical retailer Maplin going into administration within minutes of each other. As predicted in one of our recent blogs (‘We wish you a profitable Christmas’), retailers should hold on for what looks to be a rough ride this coming year.
Toys R Us
As covered in another of our recent Blogs (‘The woes of Toys R Us…’) the US arm of the company filed for bankruptcy protection last September and it was having a turbulent time in the UK. The company managed to stave off administration in December after reaching an agreement with the Pension Protection Fund on a CVA – however the magical toy store did not get its Christmas miracle and a tax bill of £15,000,000 was the final push to administrators being appointed, leaving over 3,000 jobs at risk.
Joint administrator Simon Thomas of Moorfields has reported that ‘all stores remain open until further notice’ and that they ‘will make every effort to secure a buyer for all or part of the business’. Moorfields state on their website that ‘it remains to be decided if some or all of the stores will be closed, however while the Administrators evaluate their options they will begin to implement an orderly wind down of the company’s store portfolio’. Customers are being encouraged to use gift vouchers and cards as soon as possible and large sales are expected in store.
Maplin is one of the UK’s biggest electrical retailers with over 2,000 staff and over 200 stores. It is understood that rescue talks with Edinburgh Woollen Mill failed and Chief Executive, Graham Harris, has reported that despite attempts ‘it has not been possible to secure a solvent sale of the business and as a result we have now have no alternative but to enter into an administration process’. PwC have been appointed as administrators and it is currently understood that there are no plans to close stores and that Maplin will trade through the process.
Accident and Emergency
To add to the retail trauma of this black month, struggling footwear chain Jones Bootmaker has changed hands for the second time in less than a year and has been sold via a pre-pack administration to a rival chain. Clothing chain New Look has also been reported to be considering its options, with its Executive Chairman Alistair McGeorge reporting that ‘a CVA is one of the options we are looking at’.
The retail sector should be on high alert, as even the strongest brands are not immune from the current tough trading conditions, the competitive online market and subdued customer spending.
Chapel of Rest
The retail market is a very different place from years gone by, with ghosts of Christmas past haunting the high street. How many other retail traumas* have you mourned?
|Jane Norman 2011
|Comet 2012||Phones 4 U 2014|
|TJ Hughes 2011
|Barratts 2013||USC 2015|
|Past Times 2012||Tie Rack 2013||Austin Reed/Country Casuals/BHS 2016|
|JJB Sports 2012||Blockbuster 2013||Jaegar 2017|
It’s anybody’s guess what headstones will be in the retail graveyard over the coming years…
*Some brands are still continuing in the afterlife in one form or another.