Mullan calls for reassurances from management after Toys R Us deems closure 'likely'

Toys R Us
Toys R Us

Sinn Féin MLA Karen Mullan has called for reassurances from management after Toys R Us indicated its store in the Waterside is 'likely' to close in a matter of months,

The New Jersey headquartered Toys R Us, Inc. announced on Monday that under a major global restructuring its UK operation was initiating "a process by which it is seeking creditor approval to reposition its real estate portfolio for future growth and profitability".

A spokesperson for the firm said: “It is likely that the Toys R Us store in Derry will close in the Spring of 2018.

"We will continue to honour gift cards and Take Time To Pay agreements and there will be no change to our returns policy."

But Ms. Mullan said: “There is a responsibility on Toys R Us to publicly outline their future intentions for their Waterside store.

"We have been contacted by workers expressing concern regarding the future of their jobs following an announcement in the media that Toys R Us will close a number of stores across the north, with the Derry store earmarked as a location likely to close.

"Workers are rightly worried about this development. and the impact it will have on their future.

"In the current climate, any fear of job losses is a blow to any worker and their families and increases pressure on attempts to build economic stability.

"I have written to the management at Toys R Us and asked for an outline of their future intention with the Derry store and the staff.

"It’s very important that workers’ receive their full rights and entitlements, no matter what the circumstance."

The UK Company Voluntary Arrangement (CVA) process will not impact any Toys R Us entities or stakeholders outside the UK, including employees, vendors and customers, it said.

Dave Brandon, Chairman and Chief Executive Officer, said: “As we continued to work through the financial restructuring process, we made the decision to take action to put our UK operation on stronger financial footing.

"Through the CVA process, we hope to receive authorization to restructure our UK lease obligations so that we will be better able to invest in our UK business and further improve the customer experience. Importantly, our stores and operations in our other global markets will not be impacted by this process.”

Mr. Brandon continued: “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.

"We remain committed to championing play for kids and serving as a trusted resource and friend for parents around the world. Today’s proactive measure better positions us to achieve these goals and ensures customers can continue to shop us with confidence over the Holiday season and beyond.”

Under the UK’s CVA process, Toys R Us UK has submitted a restructuring plan to its creditors and will solicit their approval of this plan over the next 14 days.

If approved by 75 percent of the creditors and then declared effective, the CVA plan would allow the UK entity to move forward with a more cost efficient store base and footprint better suited to meet the needs of today’s consumer.