The Colliers Wood branch of Toys R Us has been saved from closure as the company shuts 26 stores nationwide.
The outlet in Priory Retail Park, Colliers Wood became Toys R Us’ first two-level UK store in October 2011.
“It is our intention to keep the Toys R Us store in Colliers Wood open. We are reviewing options including downsizing the store or a rent reduction,” said a Toys R Us spokesperson.
The Colliers Wood store manager confirmed that staff morale was high and said: “The staff have been told of our situation with Toys R Us and we are still trading normally though Christmas and the New Year season as well.”
Toys R Us is currently seeking creditor approval for a company voluntary arrangement (CVA) to reduce its UK rent obligations and allow the business to move to a new, viable business model.
For Colliers Wood, Toys R Us is seeking an immediate rent reduction of 35% and a termination right after 45 days to both landlord and company.
Landlord of the retail park, Real Estate Diversified Income REIT, declined to comment.
The CVA indicates that landlords would be materially better off passing the CVA, receiving 76.16p per pound, than through going into administration, which would give 6.76p per pound.
Creditors will vote on the CVA passing on December 21, which requires 75% approval before it can be declared effective. If the CVA is not passed, the UK arm will go into administration or liquidation.
Dave Brandon, chairman and chief executive officer, said the plan would create a “stronger financial footing” for the UK.
He said: “We are confident that we are taking the right steps to ensure that the iconic Toys R Us and Babies R Us brands live on for many generations in the UK and around the world.”
Another creditor affected is Merton Council, whose corporate services team has a supplier claim to £46,032 for business rates. Merton Council confirmed they would not be attending the meeting.
On a local level, concern now turns to the Colliers Wood staff and their wellbeing. Local property expert and owner of Winkworths in Wimbledon, Edward Foley, said:
“December is their busiest time of the year, for obvious reasons, and I would think the last thing Toys R Us want to do is demotivate and the staff will already be concerned about what’s coming for them after Christmas.
“Rents in this affluent part of South West London can be a bit higher than some part of London – there’s more demand to live here and land is just more expensive. It wouldn’t surprise me if it is one of the more expensive retail parks to rent space.”
It is likely that the 26 Toys R Us UK stores will close in spring 2018. Among the stores affected if the CVA is passed are Cardiff, Old Kent Road and Watford.
All stores across the UK will remain open through Christmas and the New Year. Customers can also shop online and there will be no changes to our returns policies or gift cards.
Toys R Us UK employs 3,200 people and is Britain’s biggest toy, bike, video game and baby care retailer with 105 stores nationwide. There are approximately 1,600 Toys R Us and Babies R Us stores around the world.