Toys R Us and Maplin collapse puts 5,500 jobs at risk Toys R Us and Maplin collapse puts 5,500 jobs at risk
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  1. #1

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    Default Toys R Us and Maplin collapse puts 5,500 jobs at risk

    Taken from the FT:


    A brutal winter for Britain’s consumer economy claimed two high-profile casualties on Wednesday, as the British arm of Toys R Us collapsed into insolvency and a national electronics chain said it, too, had abandoned efforts to reach a rescue deal.

    Maplin Electronics had been forced to look for a buyer after credit insurers refused to cover its suppliers’ exposure, but called in PwC as administrators after talks drew a blank.

    Insolvency specialists at Moorfields Advisory on Wednesday began the process of closing the US retailer’s British operation, which employs nearly 3,000 people and has an estimated funding shortfall of at least £25m in its pension scheme. Its failure comes just two months after the chain won creditor backing for a sweeping restructuring plan to tame its unmanageable rent bill.

    Maplin Electronics had held urgent talks with potential buyers on Tuesday in a last-minute attempt to stay out of administration, people briefed on the discussions said.*But on Wednesday Graham Harris, chief executive, said: “It has not been possible to secure a solvent sale of the business and as a result we now have no alternative but to enter into an administration process.”

    The chains have become the first high-profile casualties in a bleak winter that saw UK consumer spending decline in January for the first time in five years, according to figures from Visa.

    “Rising costs from the national living wage, apprenticeship levy and inflation are hitting retailers with a big high-street presence hard,” said*Julie Palmer, a managing partner at Begbies Traynor, the business consultancy.

    The British outpost of Toys R US had been battling to raise cash to pay a tax liability that fell due this week, but the efforts stalled after a number of private equity funds and restructuring specialists walked away, according to people briefed on the talks.

    Since launching in the US during the post-second world war baby boom of the 1950s, Toys R Us evolved to become a “category-killing” big-box store chain, and was taken private in 2005 by a consortium of buyout funds that included Bain Capital, KKR and Vornado Realty Trust.

    The private equity owners loaded the company with $5bn of long-term loans, which forced the chain to spend more than $250m on debt service alone — a burden that analysts say may have made it harder to invest in revamping stores.

    Eventually the company buckled under the strain, further weakened by an online shopping revolution that offers consumers fast delivery and enormous choice, eroding speciality retailers’ competitive edge.

    It filed for bankruptcy in the US in September, triggering a tussle between pension regulators, landlords and executives over the future of the UK chain.

    The UK’s Pension Protection Fund, an industry-backed lifeboat that is now expected to bail out the retailer’s stricken pensioners, threatened in December to block a restructuring plan that involved closing at least a quarter of its 105 UK stores.

  2. #2

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    Maplin?!! Not Maplin...

    They will have to start building actual husband/boyfriend creches in shopping centers now.
    Because feelings...

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    Whilst I have sympathy - there is a problem for Maplins.

    Went in the other month or so - wanted an HDMI cable and an ethernet cable.

    The basic ones in Maplins came to about £25

    Went to Clas Ohlson and got the same for about £10

    Or could have got from internet for similar to Class Ohlson

    They should just become an online retailer - but maybe that boat has been missed now?

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    sorry I only ever buy things from Maplin when they discontinue items and discount heavily. They don't have anything really nice in there most of the time and their prices are too expensive.

    Feel sorry for the staff, they were nice enough.
    "If you didn't do anything that wasn't good for you it would be a very dull life. What are you gonna do? Everything that is pleasant in life is dangerous."

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    Quote Originally Posted by vetran View Post
    sorry I only ever buy things from Maplin when they discontinue items and discount heavily. They don't have anything really nice in there most of the time and their prices are too expensive.

    Feel sorry for the staff, they were nice enough.
    I just like looking at the disco lights, remote control cars and drones.
    Because feelings...

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    Quote Originally Posted by original PM View Post
    Whilst I have sympathy - there is a problem for Maplins.

    Went in the other month or so - wanted an HDMI cable and an ethernet cable.

    The basic ones in Maplins came to about £25

    Went to Clas Ohlson and got the same for about £10

    Or could have got from internet for similar to Class Ohlson

    They should just become an online retailer - but maybe that boat has been missed now?
    You can buy HDMI & ethernet cables in poundland, being digital there is no real appreciable loss on short ones.
    "If you didn't do anything that wasn't good for you it would be a very dull life. What are you gonna do? Everything that is pleasant in life is dangerous."

    I want to see the hand of history on his collar.

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    Quote Originally Posted by original PM View Post

    They should just become an online retailer - but maybe that boat has been missed now?
    In Munich we still have C&A and Woolworths (albeit called Woolworth but same tat) - both are always busy. What gives?

    If I had to guess, it's price plan and simple. Was in the UK er a few weeks ago, it was notable prices have moved up. Every visit always feels more expensive than the previous despite the Eur/Gbp not doing much. I don't know how people cope.
    Last edited by scooterscot; 28th February 2018 at 12:26.
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    I thought the BBC article on Toys R Us summed it up wonderfully for both of them:

    Toys R Us' demise was not inevitable, he argues. They just weren't dynamic enough.

    "They signed their own death warrant."
    Neither businesses came close to adapting over time. Maplins has been rubbish for years and never really seemed to know what it wanted to be. I remember when (our local one at least) was a proper electronics shop, full of geeks. I went in once and some guy had a huge radio (I'm guessing HAM) stripped down - the guys in the shop were helping him replace and substitute components and they even had some kind of breadboard mock up. Appreciate that business probably isn't sustainable, but they gradually turned into some kind of gadget shop with a bunch of very expensive bits and bobs.

    Maplins was always my absolute last resort, and even then I was often disappointed.

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    This Maplin thing has wider ramifications:

    Maplin is where men meet for sex
    Because feelings...

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    Awww. Maplin going under makes me glum. As a spotty teenage we'd get excited when the Maplin Catalogue appeared and spent ages pouring over it for our components for electronics club. To be fair though for the next 30 years all it did was remind me of electronics club. Never bought a single thing from them since.
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