Toys R Us has been in trouble for a while, and reported on plans to close some stores at the beginning of December. But its also run out of money to pay into its pension scheme, which means that the payments to its current pensioners are at risk. The Pension Protection Fund, which now administers the Toys R Us pension fund, is thus one of the company's biggest creditors and so is in a position to say that it would vote against the plan to rescue the business, unless the company agreed to put £9m into its struggling pension fund.
But failure to agree a deal would put all its 3,200 current staff at risk of redundancy.
Therefore it is good news thata way through the catch-22 has been found, with £9.8mn being injected to the pension fund over the next three years, but at the cost of closing 26 of its 105 stores in spring 2018.
In 'Toys R Us: why did it fall from grace?', the BBC's Business Reporter analyses the difficulties of a toy retailer in the current market - and in particular how Toys R Us has probably failed to respond to changes in the market. Useful to read alongside study of Porter's Strategic Matrix.
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