Toys R Us and Maplin are the latest stores to call in the administrators, and over the coming months other retailers are likely follow suit. What are your rights you have if you have bought or intend to buy items from a company that falls into administration?
A key decision will be whether or not the administrators decide to continue to accept gift cards. For this reason consumers who still hold gift cards or vouchers are advised to spend them as soon as possible.
Retailers that have gone bust 2017-18
Toys R Us: 180 stores employing 3,000 staff, collapsed 28 February. Owed £15m in VAT, due by 1 March.
Maplin: 200 electronics and gadget stores, founded 1972, also failed 28 February.
Warren Evans: went into administration earlier in February.East: fashion brand with nearly 50 outlets folded in January.
Juice Corp: business behind brands including Elizabeth Emanuel and Joe Bloggs went under in January.
Multiyork: furniture chain with 50 stores went into administration in November.
Feather & Black: bedroom furniture and bedding specialist with 25 outlets collapsed in November.
Retailers under pressure
New Look has debts of more than £1bn and has lost some of its credit insurance cover, which protects suppliers if a retailer goes bust. In the 10 months to Christmas, sales fell 11% and losses hit £123m. The company intends to close 60 stores and change its fashion ranges, but faces a struggle to win back young shoppers.
House of Fraser's Chinese owner, Sanpower, had to stump up £25m to see the store through Christmas and its debt is rated as junk. The retailer is attempting to reduce the size of its stores by 30% and has asked landlords to cut rents.
Debenhams, a 178-store chain and more than 200 years old, is axing one in four of its managers and considering closures to cut costs. It has warned that profits have been hit by lower than expected sales, with lower profit margins as a result of having to cut prices to match rivals.
Toys R Us
All 100 UK Toys R Us stores will continue trading for now and most of its stock will be heavily discounted.
Administrators Moorfields said the retailer cannot refund any returns. However, it can provide an exchange as long as customers have a “valid proof of purchase” – such as a receipt – and the product is not opened and in a resalable condition. This applies to stores only, as the online service and click-and-collect has now closed.
Shoppers who have ordered an item already on click-and-collect can still pick it up, but only if that item is still available in stock.
Anyone with Toys R Us gift cards and vouchers should spend them in stores as soon as possible before the shops are closed down.
The retailer had a “take time to pay” service, which allowed customers to reserve a product and then pay for it gradually over 12 weeks, before collection. The administrators said these reservations would be honoured, provided that the outstanding balance was paid and the goods picked up by 11 March.
Maplin
Administrators PwC said there are no immediate plans to close any stores or make any redundancies, although this is under review. The electronics giant has 217 stores in the UK, and PwC is still attempting to find a buyer for the group.
Outstanding customer orders will be delivered as usual and the administrators are assessing the status of gift cards. In the meantime, cards (which were available up to a value of £250) will continue to be honoured in stores and online.
Alex Neill, Which? managing director of home products and services, said: “It’s a worrying time for everyone when a company goes into administration
“If you have recently bought anything from Toys R Us or Maplin, you may not be able to claim a refund or exchange the item if they cease trading. If you have gift vouchers you should try to spend these in store as soon as possible.”
Which? also advises consumers still planning to shop in Toys R Us or Maplin and intending to buy something worth more than £100 to make sure they use a credit card as they will be able to make a claim against their credit card company under Section 75 of the Consumer Credit Act if anything goes wrong.
