TROUBLED retailer Toys R Us could fall into administration by the end of the month due to a £15million VAT bill.
Britain’s biggest toy store is searching for investors as part of its turnaround plan, according to Sky News.
Unless the new investors are willing to take on the outstanding tax bill, the retailer could enter administration – threatening the company’s future and 3,000 jobs.
Sky News said that bosses are racing to secure a rescue deal by the middle of next week, ahead of a February 27 deadline for the VAT demand to be paid.
According to the report, a number of firms are understood to have held talks about buying parts of the UK business, while Hilco Capital which helped save retailer HMV in 2013, has tabled a proposal to take on some of the 105 stores.
A spokesman for the troubled retailer said it wouldn’t be commenting on the the latest reports.
The future of Toys R Us has been in doubt for some time.
Before Christmas it had hoped to have staved-off the threat of administration after reaching a deal with UK’s pension lifeboat to plug a £9million blackhole.
As part of the firm’s Company Voluntary Agreement (CVA) agreement, it will be closing 25 of its 106 stores across the country this spring, but it was hoped that the deal would give the business time to restructure and pay off its debts.
But at the beginning of the month, it was reported the company’s American bosses had begun an “urgent search for a buyer” for the UK business after poor Christmas trading.
The company has said its large, warehouse style stores, which were opened in the 1980s and 1990s are now too big and expensive to run.
As part of the UK closures already announced, 800 members of staff will be losing their jobs.
Last year insolvency experts warned many shops were “running out of time”, with 43,677 retailers were showing signs of “significant” financial distress.