Toys R Us has entered into administration, leaving the future of more than 3,000 workers hanging the balance.
The troubled toys retailer had been scrambling to find a buyer as it battled to secure the cash required to pay a £15m VAT bill.
But having failed to strike a deal, the business has drafted in administrators from Moorfields Advisory to handle the process.
Moorfields said all stores would continue trading as normal “until further notice”, but most of its stock would be subject to clearance discounts and other “special promotions” as it seeks to offload its inventory.
Shoppers have been urged to redeem gift cards and vouchers “as soon as possible”, while customers will no longer be able to use its click-and-collect service as Moorfields begins the process of winding down Toys R Us’ UK business.
Stores may be subject to closure “without notice”, Moorfields said.
Toys R Us operates more than 100 stores across Britain, employing around 3,200 staff.
It had appeared to secure a reprieve in December, when creditors voted through a CVA, allowing it to shutter 26 stores and slash rents at a number of its other locations.
But the retailer has continued to find trading tough and it has been unable to find the investment urgently required to pay its tax bills.
Moorfields said the administration of Toys R Us’ UK arm would not affect the group’s operations outside of the UK.
As previously reported, its US parent filed for bankruptcy protection last September and it faced into difficult trading conditions across the pond.
Moorfields is conducting “an orderly wind-down” of Toys R Us’ UK portfolio and is actively seeking buyers for all or part of the business.
Joint administrator Simon Thomas said: “We will be conducting an orderly wind-down of the store portfolio over the coming weeks. All stores remain open until further notice and stock will be subject to clearance and special promotions. We’re encouraging customers to redeem their gift cards and vouchers as soon as possible.
“We will make every effort to secure a buyer for all or part of the business. The newer, smaller, more interactive stores in the portfolio have been outperforming the older warehouse-style stores that were opened in the 1980s and 1990s.
“Whilst this process is likely to affect many Toys R Us staff, whether some or all of the stores will close remains to be decided.
“We have informed employees about the process this morning and will continue to keep them updated on developments. We are grateful for the commitment and hard work of employees as the business continues to trade.”