Reports suggest that the directors of Toys R Us’ British chain are preparing to appoint administrators early this week.
The move will threaten more than 3,000 jobs. Sky News has reported that bosses from the ailing chain met officials from the Pension Protection Fund (PPF) on Friday to notify them of the impending move amid fading hopes of a rescue deal.
Toys R Us UK has been engaged in a search for a buyer for the last month following weak Christmas trading which has left it with little hope of paying a £15m VAT bill due on Tuesday.
Sources said that the directors of the UK’s biggest toy retailer were likely to appoint administrators tomorrow morning, barring the emergence of a last-minute financial package to keep it afloat.
One insider said that such a prospect was “very, very remote” on Friday evening.
Moorfields, a corporate recovery specialist which worked on the administration of the DVD rental chain Blockbuster five years ago, is said to have been put on standby to oversee Toys R Us’s potential insolvency.
With the VAT bill due to be payable tomorrow, hopes of finding a rescue backer for the chain, which trades from more than 100 stores, have dwindled.
Alteri Investors, an acquirer of distressed retailers, and Hilco Capital, which salvaged the music chain HMV in 2013, have both held talks with Toys R Us UK in the last fortnight but have baulked at the complexity of a deal.
It has also been announced that Toys R Us is searching for bids, which are due today, for its stores in Continental Europe. Toys R Us trades from more than 230 shops in 10 European markets, including Austria, France, Germany and Spain. Several private equity firms are understood to be planning to table bids for the division, which also has a presence in Denmark, Finland, Iceland, Norway, Poland and Portugal.