Toys R Us has revealed the list of the 26 stores that it will be closing as part of its CVA restructuring.
Stores that will be closing out of its portfolio of 105 shops include Aberdeen, Exeter, Cambridge, both stores in Manchester and Watford and the Old Kent Road sites in London.
Insolvency adviser Alvarez & Marsal is advising on the CVA process, which will require approval from 75% of creditors to proceed.
The majority of stores that have been targeted for closure are its larger stores – which can extend to as much as 50,000 sq ft – and are viewed as being outdated and no longer fit for purpose against increased competition from e-commerce companies.
The retailer said the stores will remain open for the crucial trading period.
Managing director Steve Knights said: “Like many UK retailers in today’s market environment, we need to transform our business so that we have a platform that can better meet customers’ evolving needs.
“The decision to propose this CVA was a difficult one, but we determined it is the best path forward to make essential changes to the business.
“Our newer, smaller, more interactive stores are in the right shopping locations and are trading well, while our new website has generated significant growth in online and click-and-collect sales.
“But the warehouse-style stores we opened in the 1980s and 1990s, while successful in the early days, are too big and expensive to run in the current retail environment. The business has been loss-making in recent years and so we need to take strong and decisive action to accelerate the transformation.”
Creditors will solicit their approval of the proposals over the next 17 days and, if approved, the store closures would begin in spring 2018.
The retailer has around £260m of debt secured against its freehold estate as part of a CMBS loan which it agreed in 2013 and is due to be repaid in 2020.
The company owns around 29 stores and a distribution centre in its freehold estate, a handful of which have been included in the schedule of stores outlined for closure, many of which sit on valuable development land.
To send feedback, e-mail amber.rolt@egi.co.uk or tweet @AmberRoltEG or @estatesgazette
