Toys R Us was facing a £15m VAT bill, however poor sales has meant it was unable to pay the debt.
All of toy retailer’s 106 stores will continue to trade as normal while administrators begin an “an orderly wind-down” period.
Toys R Us joint administrator Simon Thomas said: “Whilst this process is likely to affect many Toys R Us staff, whether some or all of the stores will close remains to be decided.”
“We will make every effort to secure a buyer for all or part of the business. The newer, smaller, more interactive stores in the portfolio have been outperforming the older warehouse-style stores that were opened in the 1980s and 1990s.”
Electronic retailer Maplin announced it’s collapse just an hour after Toys R Us with CEO Graham Harris releasing a statement: “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.”
He continued: “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.”
5,500 jobs have been put at risk due to both companies entering administration.