Toys R Us and Maplin both fall into administration, with thousands of jobs at risk
The UK arm of Toys R Us has gone into administration, putting 3,000 UK jobs at risk and confirming yesterday's reports.
And on a dark morning for UK retail, it was announced less than hour later that electronics firm Maplin has also fallen into administration.
Administrator Moorfields has been appointed to begin "an orderly wind-down" of Toys R Us - although the firm insisted it is still seeking a buyer.
Toys R Us stores will keep trading ‘until further notice’ and remaining stock will be sold off at heavily discounted prices and subject to special promotions.
Customers are being warned stores may close down without notice and are being urged to redeem gift cards and vouchers as soon as possible.
The company had an outstanding £15 million tax bill and owed money to lenders, and poor trading over the crucial Christmas period put further pressure on the already struggling retailer.
Simon Thomas, Moorfields partner, said: "We will be conducting an orderly wind-down of the store portfolio over the coming weeks.
"We have informed employees about the process this morning and will continue to keep them updated on developments. We are grateful for the commitment and hard work of employees as the business continues to trade.
"We will make every effort to secure a buyer for all or part of the business."
Richard Lim, chief executive of Retail Economics said: "All is not well on UK high streets.
"The perfect storm of spiralling operating costs, softer consumer demand, and seismic structural changes has claimed another victim."
Meanwhile, electronics chain Maplin - another of the UK's biggest store chains - has also fallen into administration after failing to find new funding.
Maplin, which has over 200 stores in the UK, was forced into administration less than an hour after Toys R Us, putting around 2500 jobs at risk.
Graham Harris, CEO of Maplin, has blamed the slump in the pound since the EU referendum, saying: “I can confirm this morning that it has not been possible to secure a solvent sale of the business and as a result we now have no alternative but to enter into an administration process.
“During this process Maplin will continue to trade and remains open for business. The business has worked hard over recent months to mitigate a combination of impacts from sterling devaluation post Brexit, a weak consumer environment and the withdrawal of credit insurance.
“This necessitated an intensive search for new capital that in current market conditions has proved impossible to raise. These macro factors have been the principal challenge not the Maplin brand or its market differentiation.
“We believe passionately that Maplin has a place on the high street, and that our trust, credibility and expertise meets a customer need that is not supported elsewhere.
“We will now work tirelessly alongside Zelf Hussain, Toby Underwood and Ian Green, from PWC, who have been appointed as the as Joint Administrators of Maplin Electronics Limited, to achieve the best possible outcome for all of our colleagues and stakeholders.”