In 2017 Toys “R” Us came under extreme commercial pressure from operating in a chaotic retail environment. Gordon Brothers was initially mandated by the company and the CVA supervisor, Alvarez & Marsal, in November 2017, to provide an inventory valuation and general advisory services in support of the CVA application process.
During the process 25 stores were identified for closure, with the hope that the remaining estate would continue. Gordon Brothers was mandated to close the 25 stores disposing of £13.4m of inventory at retail value, along with the furniture, fittings and equipment (FF&E), over an 8-week period. We initiated our proven financial and operating model to complete this task whilst the search for a buyer of the residual business began.
The buyer search was unsuccessful and in February 2018 Moorfields Advisory was appointed Administrator. We entered into a highly competitive tendering process to close the remaining 75 stores across the UK. Our long-standing working relationship with Moorfields coupled with our cast-iron financial and operational guarantee won us the bid. Within 2-weeks of our appointment we had emptied the central warehouse inventory into stores and continued to sell through £73m of inventory to zero over 7-weeks, leaving stores empty and ready to return to landlords. In addition to this we cleared the warehouse and stores of FF&E within the given timeframe to recover the maximum return possible and minimise costly strip-out and landfill expenditure. Our operational excellence and ability to autonomously take responsibility for the retail inventory and execution brought the project to a successful closure, maximising recoveries for creditors.
At the same time, in the US, Gordon Brothers formed part of a team of disposition firms who completed going-out-of-business sales at all 735 Toys”R”Us® and Babies”R”Us® locations through-out the U.S. and Puerto Rico, with inventories exceeding $2 billion in retail value.