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| Toys R Us and Maplin face collapse with 5,500 jobs at risk | Toys R Us and Maplin face collapse with 5,500 jobs at risk |
| (about 9 hours later) | |
| Toys R Us in the UK and electronics chain Maplin are on the brink of collapse, putting 5,500 jobs at risk. | Toys R Us in the UK and electronics chain Maplin are on the brink of collapse, putting 5,500 jobs at risk. |
| The struggling retailers - two of the UK's best known chains - are understood to have put administrators on standby after failing to secure a rescue deal. | The struggling retailers - two of the UK's best known chains - are understood to have put administrators on standby after failing to secure a rescue deal. |
| Maplin - owned by Rutland Partners - had put the business up for sale, but talks with a potential buyer are understood to have broken down. | |
| Toys R Us was also seeking a possible sale but has failed to secure a buyer. | Toys R Us was also seeking a possible sale but has failed to secure a buyer. |
| Maplin has 200 stores and 2,500 staff in the UK, while Toys R Us employs about 3,000 workers in its 106 stores. | |
| Maplin in talks with potential buyers | Maplin in talks with potential buyers |
| The toy chain in the UK - whose US owner filed for bankruptcy protection last September - is facing an imminent deadline for a £15m VAT bill which it will not be able to pay without selling the business. | The toy chain in the UK - whose US owner filed for bankruptcy protection last September - is facing an imminent deadline for a £15m VAT bill which it will not be able to pay without selling the business. |
| It had managed to stave off collapse in December by agreeing a rescue plan to allow it to restructure its operations, including the closure of at least 26 stores planned for this Spring. | It had managed to stave off collapse in December by agreeing a rescue plan to allow it to restructure its operations, including the closure of at least 26 stores planned for this Spring. |
| But with poor sales continuing into the new year and the VAT bill looming, the only route left for the firm to continue trading was to find a buyer which is now understood to be unlikely. | But with poor sales continuing into the new year and the VAT bill looming, the only route left for the firm to continue trading was to find a buyer which is now understood to be unlikely. |
| Meanwhile, Maplin had been in talks with Edinburgh Woollen Mill, the clothing company that owns Peacocks, Country Casuals and several other retailers, over a possible sale, according to Sky News. | Meanwhile, Maplin had been in talks with Edinburgh Woollen Mill, the clothing company that owns Peacocks, Country Casuals and several other retailers, over a possible sale, according to Sky News. |
| The move came after insurers cut credit cover last year because of Maplin's falling profits. | The move came after insurers cut credit cover last year because of Maplin's falling profits. |
| The breakdown of the sale talks means that administration is now the most likely outcome for the firm. | The breakdown of the sale talks means that administration is now the most likely outcome for the firm. |
| High Street problems | High Street problems |
| Toys R Us and Maplin are the latest of a string of well-known retailers to run into financial problems in recent months. | |
| Clothing chain New Look and department store chain House of Fraser are seeking financial support from landlords and other creditors. | |
| Meanwhile, bed retailer Warren Evans, Asian-inspired High Street fashion brand East and High Street furniture chains Feather & Black and Multiyork have all recently fallen into administration. | |
| Toys R Us in the UK has blamed its problems on its "warehouse-style stores". | Toys R Us in the UK has blamed its problems on its "warehouse-style stores". |
| It opened these in the 1980s and 1990s, but it said in December that they had become "too big and expensive to run in the current retail environment". | It opened these in the 1980s and 1990s, but it said in December that they had become "too big and expensive to run in the current retail environment". |
| The UK business is understood to have made a loss for seven out of the past eight years of trading. | The UK business is understood to have made a loss for seven out of the past eight years of trading. |
| Retail analyst Kate Hardcastle, from Insight With Passion, said both Toys R Us and Maplin had cut staffing to try to cut costs, which had led to poor service in the shops. | Retail analyst Kate Hardcastle, from Insight With Passion, said both Toys R Us and Maplin had cut staffing to try to cut costs, which had led to poor service in the shops. |
| She said for Toys R Us, the problem was particularly acute because it sold mainly branded goods. | |
| "Therefore to succeed you need to offer some kind of differentiating factor - either a good discount or an experience that makes visiting the stores worthwhile. | "Therefore to succeed you need to offer some kind of differentiating factor - either a good discount or an experience that makes visiting the stores worthwhile. |
| "Toys R Us didn't move with the times. It didn't do discounts or retail theatre," she said. | |