Toys R Us is seeking offers for its loss making UK arm before the end of this week, with the threat of bankruptcy ‘being more imminent than in the US.’
Sky News reports that advisers to the company’s US parent have met prospective bidders in the last 48 hours and told them to submit expressions of interest by the end of Thursday.
The truncated timetable underlines the precarious future of Toys R Us in Britain, just six weeks after it was thought to have been salvaged in an 11 hour rescue deal.
The entire European operations of the ailing retailer are now on the market, encompassing 236 stores outside the UK in 10 countries including Austria, France, Germany and Spain.
The UK and European businesses are being sold through separate processes being run by Lazard and Alvarez & Marshal.
Sources have said that the UK faced the more imminent threat of bankruptcy, with a cash call due later this month meaning administration is inevitable without new funds being injected into the business.
Poor Christmas trading has left the British business facing cashflow issues, and one insider said it looked ‘close to unsaveable.’
The company, which currently employs about 3,200 people in Britain, is already planning to shed up to 800 jobs through a process called a company voluntary arrangement (CVA), which was approved by creditors just three days before Christmas.
The CVA is intended to provide breathing space for Toys R Us UK to improve its fortunes by closing 26 of its loss-making stores and securing big rent reductions at many others.
Under that plan, which won the backing of 98% of creditors, including the Pension Protection Fund (PPF), its loss-making larger stores are due to begin closing in the spring.
A Toys R Us UK spokesman declined to elaborate on a statement issued last week about the plan to offload the British operations, which said the US business was "exploring a number of options".
"These conversations are confidential but I can assure you that they are acting in the best interests of employees, business partners, shareholders and lenders," the spokesman said.