Embattled ASX-listed Toys R Us ANZ business has brought in voluntary administrators as attempts to pursue a recapitalisation program with primary shareholders stall in the face of insolvency fears.

The group appointed Luke Andrews and Duncan Clubb of BDO Business Restructuring as its voluntary administrators on 5 June 2025, effective immediately.

"The company is no longer in a position to pursue a solvent recapitalisation plan," the company stated. "In light of these events, the board has determined that the company is, or is likely to become, insolvent and that the appointment of an administrator is in the best interests of the company."

Toys R Us has said it expected to trade as usual "where possible" while the process gets underway and administrators look to see if it can be restructured or sold off, but trading has been suspended on the ASX. The company has also said its primary shareholders will work with administrators on any restructuring options proposal that is put forward to creditors.

In its half-yearly report to 31 January 2025, Toys R Us ANZ reported a 49 per cent drop in revenue from continuing operations to $3.053m, resulting in a net loss of $713,000. This included below-average performance during the Black Friday / cyber week sales, down $200,000 year-on-year. The loss was an improvement on the $9.6m loss reported the year prior, and the company also noted a 37 per cent overall product margin, the company.

But it wasn't enough. By the time the quarterly results came in for the three months to 30 April 2025, the company was working with its primary debt holder on short-term cash shoring up while it sought to finalise another recapitalisation plan. Toys R Us reported quarterly sales of $863,00, with gross profit more than double against the previous quarter, albeit on limited inventory.

Yet the company also had secured borrowings of $13.79 million against a total $13.9m total borrowing facility at a 11.5 per cent fixed interest rate, which was set to tip into further interest fees should it default on any interest payments. It also had a $5m funding agreement with Mercer Street Global Opportunity Fund.

"The recapitalisation plan, if agreed, will provide the Company with sufficient capital to not only fund ongoing operations but also enable the business to deliver financially sustainable operations," the company said on 30 May. A week later, the administrators were called in.

In February, Toys R Us ANZ announced its CEO, Penny Cox, had resigned with immediate effect after two years in the job pursuing a house of brand strategy. In the interim, it appointed Kelly Humphreys, Chair of the Company as Executive Chair and Teresa Smith will be appointed Executive Director.

Speaking to Mi3 last year, Cox noted the tough task ahead for Toys R Us after years of struggling with ongoing losses in the millions and a need to turnaround the retail business. At the time, she flagged heavy investment into overhauling its tech and data platforms across commerce, marketing and customer service as one of several key turnaround pillars being pursued.

The original Toys R Us parent company spectacularly collapsed in 2018. ASX-listed retailer, Funtastic, took on the ashes of the Australian business in 2019 and gained a licence to the global brand. Yet it's not been an easy ride. In its 2023 financial year, Toys R Us reported losses of $32.6 million after top-line revenue declined by 15.2 per cent. In its half-yearly report to 31 January 2024, the group reported $9.2 million in revenues, down 54 per cent year-on-year (including non-continuing operations), with activity losses of $6.58 million and a net loss overall of $9.55m.

* With additional reporting by Nadia Cameron