Toys R Us is to close all 100 stores in the UK within six weeks after failing to find a buyer.
The total collapse of the nationwide retailer means 3,000 jobs will be lost.
Staff were told that a deadline to identify a buyer for the business passed at midday and that “realistically we do not expect to receive an offer”.
According to source, some people will be made redundant today and that the stores will close within six weeks.
Simon Thomas, joint administrator at Moorfields, said: “We have made every effort to secure a buyer for all or part of the company’s business. This process attracted some interest, but ultimately no party has been able to move forward with a formal bid prior to the expiration of the stated deadline.
“It is therefore with great regret that we have made the difficult decision to … proceed with a controlled store closure programme.”
About 25 stores will close on Thursday and 541 staff will be made redundant. Stock will be sold off at rock-bottom prices over the next few weeks.
Toys R Us collapsed into administration towards the end of February after being hit by crippling debts in the US, a significant pension hole in the UK and a difficult trading environment.
Final deadline for any offer for the Toys R Us business passes at midday – staff have just been told “realistically we do not expect to receive an offer”
— Chris Choi (@Chrisitv) March 14, 2018
Traditional “bricks and mortar” retailers have been struggling to compete with online offerings.
The writing has been on the wall for some months for Toys R Us. It managed to strike a £9.8m deal with the pension watchdog before Christmas that bought it some more time but that now appears to have run out.
It was forced into administration when it was due to pay a £15m VAT bill. The US parent company filed for bankruptcy in September and reports suggest it may start closing its 800 stores in the US as early as this week.
On the same day Toys R Us in the UK called in the administrators, electronics retailer Maplin announced it was also in deep trouble – adding to the scores of established high street names to have folded in recent years.
Analysts say there are thousands of retailers showing real signs of financial distress.
Hannah Maundrell, editor in chief of money.co.uk, warned Toys R Us shoppers: “The deadline has now passed to use gift cards in store and online so these are now unlikely to be accepted.
“Toys ‘R’ Us have said all orders received prior to them going into administration will be fulfilled or refunded.”