The largest chain of toy stores in the Nordic countries is to be streamlined.
As a result of “significant changes in the way consumers buy toys”, the board of directors of the largest chain of toy stores in the Nordic countries – Top-Toy – has filed for restructuring in the bankruptcy court.
”We have not succeeded in making Top-Toy profitable in its current form, and therefore we now have to make fundamental organisational changes by simplifying and optimising the healthy parts of the business,” CEO Per Sigvardsson explained.
This is to prepare for an actual restructuring, which Top-Toy and its owners are now working on, and which must subsequently be approved by the bankruptcy court.
Top-Toy filed the company’s annual report today, which shows a negative operating profit of DKK149m and a net loss of DKK2,031m. Operating profit has been negatively impacted by “very disappointing” Christmas sales in 2017 caused by the implementation of a new ERP system. The net loss for the year has been affected by a considerable write-down of goodwill of DKK1,660m, among other things, as well as a number of one-off expenses in relation to the ERP implementation and organisational restructuring.
The executive management, board of directors and auditors have been unable to approve continued operations without a guarantee of further capital. Top-Toy’s owners, which have previously injected additional capital into the company, don’t wish to invest further, nor increase financing in the current structure.
”We have come a long way and have streamlined large parts of the company, but unfortunately, we have reached a point where a more radical change is called for if the company is to become profitable,” said chairman of the board Michael Hauge Sørensen.
The company now plans to close unprofitable stores, simplify the value chain and adjust fixed costs including support functions at the head office in Vallensbæk in Denmark and in Hong Kong. Unfortunately, this also means that a number of employees across the organisation may be affected.
This spring, the board of directors introduced a new executive management team in the form of CFO Christian K. H. Jakobsen and CEO Per Sigvardsson. Christian and Per will now be in charge of creating a “healthy and future-proof Top-Toy”, according to a company statement.