UK retailers Maplin and Toys R Us have both collapsed into administration after failing to secure rescue deals, putting more than 5,500 employee jobs at risk.

A weak pound following the Brexit vote, weak consumer confidence and a withdrawal of credit insurance contributed to the firms’ downfalls, with these factors making it ‘impossible’ to raise capital, according to Maplin CEO Graham Harris.

A statement from Harris read: “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.

“We believe passionately that Maplin has a place on the High Street and that our trust, credibility and expertise meets a customer need that is not supported elsewhere.”

Maplin will now work with PwC through the administration process. Zelf Hussain, joint administrator and PwC partner, said: “The challenging conditions in the UK retail sector are well documented. Like many other retailers, Maplin has been hit hard by a slowdown in consumer spending and more expensive imports as the pound has weakened

“Staff have been paid their February wages and will continue to be paid for future work while the company is in administration.”

Toys R Us has struggled to raise sufficient funds to pay off a £15 million tax bill, and has had to appoint Moorfields Advisory as administrator to begin “an orderly wind-down of the store portfolio over the coming weeks.”

Simon Thomas, joint administrator of Toys R Us, said: “We will make every effort to secure a buyer for all or part of the business. The newer, smaller, more interactive stores in the portfolio have been outperforming the older warehouse-style stores that were opened in the 1980s and 1990s.”

Commenting on the announcements, Patrick Gallagher, CEO of CitySprint Group, said: “This week has seen another two High Street retail chains go into administration. Whilst it’s sad news, it’s also another reminder of just how difficult times are for today’s retail industry. In such a tough market, with consumer spend on the high-street rapidly declining, retailers simply can’t afford not to put their customers at the heart of their offer.

“With a business model that failed to use its stores to support its digital channels, Toys R Us couldn’t meet the expectations of today’s shoppers," he continued. "Unfortunately, as spending power continues to be squeezed, it’s likely other retailers could risk facing the same trouble.”

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