Toys R Us has plunged into administration putting 3,000 jobs at risk after the retailer failed to pay a £15million VAT bill.

The toy seller was scrambling to find a buyer before hitting the payment deadline last night on the hefty bill, but failed = with experts citing its inability to compete with Amazon and major supermarkets as the reason for its downfall.

Administrator Moorfields has been appointed to conduct what it called an orderly wind-down of the company's store portfolio, although the firm insisted it is still seeking a buyer.

Toys R Us is one of three major companies in trouble today. Electronics firm Maplin also collapsed into administration, putting another 2,500 jobs at risk.

And restaurant chain Prezzo plans to closed 100 of its outlets across the UK as it battles to restructure its finances.

Toys R Us has plunged into administration putting 3,000 jobs at risk after the retailer failed to pay a £15million VAT bill

Insolvency specialist at Shakespeare Martineau, Michael Mulligan, said: 'Toys R Us ultimately failed to adapt to the change in British shopping habits and did not properly invest in its business in order to compete with Amazon and the major supermarkets.

'This is not the first high profile retail insolvency of the year and we expect more, particularly in vulnerable sectors such as retail, construction and the restaurant trade.

'Recent insolvency statistics demonstrate that this is a growing trend and failing to take notice and adapt accordingly to changing consumer behaviour could be deadly for UK retailers.'

Toys R Us administrator, Simon Thomas, a partner at Moorfields, said: 'We will be conducting an orderly wind-down of the store portfolio over the coming weeks.

'All stores remain open until further notice and stock will be subject to clearance and special promotions.

'We're encouraging customers to redeem their gift cards and vouchers as soon as possible.

'We will make every effort to secure a buyer for all or part of the business.'

What do customers need to know about the collapse of Toys R Us? Will Toys R Us be accepting returns? Toys R Us stores will remain open during the administration process, but 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. Will customers receive online orders made before the administration? All click & collect orders made will be honoured as long as stock is available. Customers have been advised to pick up their goods as soon as possible. Can customers continue to buy products online? Online trading at Toys R Us stopped at 10am on Wednesday, meaning no new online or click & collect orders can be made. However, the retailer will be making discounts to products in store which customers can buy. What should customers do if they have a Take Time to Pay agreement with Toys R Us? If they have settled their agreement but not picked up their products, then shoppers should visit a store as soon as possible. Customers who have not settled their agreement and picked up their products need to visit their nearest store by Sunday March 11 to pay the balance or to buy goods in store that 'exceed the value of the deposit'. No cash refunds will be made for deposits paid before the administration. What will happen to customer loyalty cards and vouchers? Administrators Moorfields said no new loyalty cards will be issued and discount coupons cannot be exchanged for loyalty points because of the 'substantial discounting' in stores. All gift cards will be honoured during the administration process and shoppers should use them as soon as possible. The balance on gift cards cannot be refunded. How will customers know when their local store is closing? Moorfields said: 'It is too early to say. The administrators will manage the store trading strategy while also evaluating the options for the company's future and determining how to obtain the best possible outcome. 'It remains to be decided if some or all the stores will be closed.' Advertisement

All stores will continue trading until further notice and much of the stock will be subject to clearance discounts and other special promotions, Moorfields confirmed.

'Whilst this process is likely to affect many Toys R Us staff, whether some or all of the stores will close remains to be decided.

'We have informed employees about the process this morning and will continue to keep them updated on developments. We are grateful for the commitment and hard work of employees as the business continues to trade,' Mr Thomas added.

Gift cards and vouchers will be honoured while the stores continue to trade, but customers are being encouraged to redeem vouchers as soon as possible as stores may be subject to closure without notice.

No further gift cards will be sold from Wednesday.

Toys R Us, which employs around 3,000 staff in the UK, is understood to have struggled with cash flow pressures after sales were squeezed by worse-than-expected trading over the crucial Christmas period.

What Toys R Us collapse means for members of the firm's pension schemes The Pension Protection Fund, the lifeboat for failed firms, is expected to be left nursing a £37million bill as it takes on the firm's pension liabilities. Ian Browne, pension specialist at Old Mutual Wealth, said there was no need for members of the company's pension schemes to panic. 'When schemes collapse they fall into the hands of the PPF, who have the responsibility for paying workers' pensions. Those who already reached the scheme's normal pension age will receive 100% of their pension. 'For those who haven't reached the normal pension age, the PPF will pay 90% of what their pension is worth, up to a cap. This cap is currently just over £38,500 per year for someone retiring at 65, so it only affects the highest earners. 'Members of the scheme can still take early retirement and a tax-free cash lump sum. In fact, the way PPF calculates these can sometimes be more generous than a typical scheme.' Advertisement

It comes after the beleaguered firm announced a Company Voluntary Arrangement, which allows debt to be paid back over a fixed period, at the end of last year.

This move was intended to shore up the company's financial position by allowing it to shut loss-making stores and secure substantial discounts on rental costs.

The restructuring plan won the approval of 98 per cent of Toys R Us's creditors in December, and had the backing of the Pension Protection Fund (PFF).

The move would see at least 26 loss-making UK stores shut and spark the loss of up to 800 jobs.

The PPF had earlier refused to back the retailer's plans, but concessions from the company, including an offer to reduce its deficit recovery plan to 10 years from 15 years, meant the deal finally received its blessing.

In total, Toys R Us has agreed to pay £9.8 million into the pension plan, made up of £3.8 million in 2018 and £6 million over 2019 and 2020.

A checkout worker, who did not wish to be named, said: 'We've received warnings about a potential administration and obviously heard bits and bobs on the news.

'It's been a very scary time, especially when you have children like me.

'I've been working here for a few years and now I don't know what to do. I'm just hoping that things will work out for the best, but you never know, do you?

'Jobs in retail are hard to get hold of these days. If I lose my job here, there's a possibility that I might have to retrain for.

'This is close to home for me, it's easy to sort out the kid's day in day out. If I lost that then things would become very difficult, and I'd imagine other employees would have similar concerns.'

Electronics company Maplin has become the second retailer on the same day to collapse into administration, putting another 2,500 jobs at risk.

The group, owned by private equity firm Rutland Partners, called in PwC on Wednesday after attempts to rescue the chain failed.

Maplin has 217 stores in the UK, and PwC is still attempting to find a buyer for the group.

Graham Harris, the company's chief executive, said: 'I can confirm this morning that it has not been possible to secure a solvent sale of the business and as a result we now have no alternative but to enter into an administration process.

'During this process Maplin will continue to trade and remains open for business.'

Hannah Maundrell, Editor in Chief of money.co.uk comment: 'Sadly high street retailers are having a hard time at the moment and Maplin is the latest victim. Stores are struggling to compete with prices online and our shopping habits have changed dramatically.

'It's undoubtedly distressing news for employees of Maplin. Check what redundancy rights you have and dig out any income or mortgage protection policies you hold just in case.

'Maplin have decided to continue trading for the moment, however if the administrator decides to suspend gift vouchers and refunds, you could be in for a lengthy battle to get your money back if you paid via cash.'

Alex Neill, Which? managing director of home products and services, said: 'If you are planning to shop in Toys R Us or Maplin and intend to buy something worth more than £100, make sure you use a credit card as you'll be able to make a claim against your credit card company under Section 75 of the Consumer Credit Act if anything goes wrong.'

When was Toys R Us founded and how did it collapse? In 1948, war veteran Charles Lazarus opened his first baby furniture store, Children's Bargain Town, in Washington, D.C. Two years later, Lazarus began to sell toys and he soon realised that unlike furniture, toys fell out of fashion or broke - prompting parents to return to the store to buy more. In June 1957, he restructured his business and opened his first store solely dedicated to toys - creating the Toys R Us brand. In June 1957, Charles Lazarus restructured his business and opened his first store solely dedicated to toys - creating the Toys R Us brand By the early 1980s Toys R Us looked to diversify and the company branches out into children's clothing when it opened Kids R Us stores in Paramus, New Jersey, and Brookyln, New York. The firm also went international when it opened outlets in Canada and Singapore. The chain came to the UK in 1985 and now boasts 105 outlets across England, Scotland, Wales and Northern Ireland. In 1998, it realised the potential of the internet and allowed people to buy items online from toysrus.com. Toys R Us’ UK arm was plunged into crisis last year after its American parent company declared bankruptcy in the US and Canada. Bankruptcy proceedings in the US work differently to the UK, with companies able to seek court backing for a plan to rescue their business if they have the support of lenders. At first Toys R Us said stores in Britain would not be affected but soon afterwards bosses here announced they would axe hundreds of jobs and a quarter of the chain’s 105 stores in a bid to balance the books. At first Toys R Us said stores in Britain would not be affected but soon afterwards bosses here announced they would axe hundreds of jobs and a quarter of the chain’s 105 stores in a bid to balance the books Its bid to push the changes through under a so-called company voluntary agreement hit a stumbling block, however, because of a row over a £30million black hole in its pension scheme. Toys R Us needed approval from the Pension Protection Fund, which refused to give it unless the firm injected nearly £10m into its retirement pot. After a tense showdown, bosses eventually agreed to pay £3.8million this year and another £6million over 2019 and 2020. That deal was supposed to give the company breathing space, but it plunged into administration today. The news comes as the US arm of toy giant plans to close a further 200 stores putting thousands of jobs at risk as it attempts to avoid a total collapse of the business. Toys R Us closed 182 stores in the US last year, hitting 4,500 employees. The decision to close another 200 stores would take the total to almost 400 - roughly half of its estate in the US. It comes after the retailer saw disappointing sales over the crucial Christmas period as demand for online shopping continues to hammer the High Street in the UK and in the US. Advertisement

Electronics company Maplin has become the second retailer on the same day to collapse into administration, putting another 2,500 jobs at risk

Restaurant chain Prezzo plans to closed 100 of its outlets across the UK as it battles to restructure its finances

Meanwhile, 100 Prezzo-owned outlets are due to close, including the complete shut down of its Tex-Mex chain Chimichanga

Sources told Sky News that the CVA process would be unveiled 'in the next few days', and would involve negotiations with landlords to secure rent reductions at many of Prezzo's remaining restaurants.

Hundreds of jobs are at risk at the firm with a 4,000-strong workforce.

AlixPartners, the advisory firm, is overseeing the CVA.