The U.K. retail branch of U.S. toy and game company Toys R Us is seeking creditor approval of a plan to restructure its operations in the coming year.
Monday news reports from CNBC said the British branch of the company is looking to close approximately 26 of its 105 stores in the country and has filed a Company Voluntary Arrangement plan. Toys R Us U.K. is hoping to receive creditor approval in the next 17 days, allowing it to move forward with shuttering the locations.
Toys R Us U.S. filed for bankruptcy in September, then received a $3.1 billion infusion from a group of lenders led by JPMorgan Chase that allowed it to announce new steps in its post-bankruptcy restructuring. The company partnered with global marketplace solutions provider Mirakl to create a new online marketplace with enhanced customer touchpoints to “get merchandise into shoppers’ hands faster,” Chain Store Age reported at the time.
According to Toys R Us U.K., Company Voluntary Arrangement approval would reduce the British branch’s rental obligations and allow it to streamline its efforts, including creating a more viable business model and eliminating workforce redundancies. U.K. retail closings would not take effect until after the holidays and into the New Year.
Supply chain finance issues have continued to hinder the struggling toy store, with November reports indicating the U.S.-based company’s plans for bankruptcy had led suppliers to either stop shipping products to the company or demand cash on delivery. Both negatively impacted Toys R Us’ inventory and accelerated its financial struggles, also further jeopardizing suppliers’ finances too.
To combat its ongoing issues, the U.S.’ largest toy retailer rolled out an augmented reality (AR) mobile app for smart devices in late October, and the technology was tested in 23 locations. The app, developed by partner PlayFusion, offers multiple AR games and is activated by scanning access points at the toy store’s brick-and-mortar locations.
Toys R Us also launched a specialized concept shop for the holiday season in New York City’s Times Square, hired 12,000 seasonal workers to staff its stores and fulfillment centers and launched a plan to modernize its retail locations across the country.