The UK operations of Toys R Us has been saved from collapse after reaching a deal with Pension Protection Fund. The development will be welcomed by 2,000 employees in the UK who will keep their jobs, though it will not provide any consolation to the 800 whose posts will be axed when 26 stores close next year. (See: Toys R Us faces collapse, seeks support of PPF for planned restructure).
According to commentators, the pension deal, which will allow Toys R Us to escape administration in the UK is something of a mess, untidy and imperfect – but probably the best that could be negotiated against a tight timetable.
According to commentators, at least the Pension Protection Fund (PPF), the industry lifeboat, did not try to over-sell the deal. The company's offer ''goes a long way'' to addressing concerns, PPF said. What this means is that not all its concerns had been addressed.
The PPF wanted £9 million to go into Toys R Us' defined-benefit fund up-front. Rather it has got £2.2 million up-front and £1.6 million next October, which will be followed by two payments of £3 million in 2019 and 2020. It could be called £9.8 million but the extended timetable is a significant concession given that Toys R Us' long-term survival in the UK can hardly be viewed as certain, according to commentators.
Toys R Us will continue to trade under its company voluntary arrangement (CVA), which saves it from administration.
Steve Knights, managing director of Toys R Us UK, said, "The vote in favour of the CVA represents strong support for our business plan and provides us with the platform we need to transform our business so that we can better serve our customers today and long into the future, BBC reported.
"All of our stores across the UK will remain open for business as normal until spring 2018. Customers can continue to shop online and there will be no changes to our returns policies or gift cards across this period."