Friday 20 July 2018

Maplin and Toys R Us jobs at risk in a black day for retail

Around 3,000 Toys R Us jobs are at risk in Britain. Photo: PA
Around 3,000 Toys R Us jobs are at risk in Britain. Photo: PA
Donal O'Donovan

Donal O'Donovan

Tough trading conditions on Britain's high streets claimed two high-profile retailers on Wednesday, as Toys R Us UK and electronics chain Maplin collapsed after failing to find buyers.

An Irish Toys R Us franchise with outlets in Dublin and Limerick closed in 2016. Maplin has six outlets here - in Dublin, Cork, Galway and Limerick.

According to PwC, which is still attempting to find a buyer for the group, there are 82 people in employment across the six stores here.

The administration of the two large-scale UK retailers, a form of creditor protection, highlights the grim state of the UK retail sector, with other well-known brands also trying to restructure.

Ireland's Smyths Toys may benefit from the latest crisis at the UK arm of Toys R Us, but the wider UK retail sector is now braced for major job losses.

Toys R Us UK's administration puts around 3,000 jobs at risk, administrator Moorfields Advisory said. All of the stores will continue trading until further notice, but Moorfields said that the company had entered administration after an "unsuccessful attempt to sell its business as a going concern".

The toy retailer has struggled in Britain in recent years as shoppers increasingly prefer to spend online rather than visit its large out-of-town stores.

In contrast, Galway-headquartered Smyths Toys has enjoyed strong growth in the UK in recent years, with sales climbing by 19pc from £334m to £396.49m (€447m) in 2016 on the back of new store openings and online sales.

The Irish chain only entered the UK market in 2007 and its business has grown exponentially in the UK since then.

The collapse of Toys R Us and Maplin put over 5,000 jobs at risk, and Maplin blamed adverse economic factors for its collapse.

"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," Maplin CEO Graham Harris said in a statement.

"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."

Mr Harris said he believed that Maplin had a place on the high street, and that Maplin stores would stay open.

Meanwhile, Italian restaurant chain Prezzo is reported to be planning to close up to a third of its 300 UK outlets and House of Fraser has asked landlords for rent reductions.

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