Toys R Us trades from big warehouse-like out-of-town stores, around 40,000 sq ft in size, but is increasingly shifting to smaller stores, about half the size, with more play areas to make shopping more enjoyable for families.
Steve Knights, managing director of Toys R Us UK, said the stores are "too big and expensive to run in the current retail environment".
While the US-based group filed for bankruptcy protection in the USA and Canada in September, it hopes restructuring proposals will be agreed by creditors within the next 17 days to avoid the company going into administration.
The company has 105 shops in total, including its newer, smaller shops which the company says have been trading well.
The group will on 21 December ask creditors to approve a company voluntary agreement (CVA), an insolvency procedure used by retailers to close loss-making stores.
Mr Knights said: "Like many United Kingdom retailers in today's market environment, we need to transform our business so that we have a platform that can better meet customers' evolving needs".
The UK based retailer will soon announce, on Monday, its plans for the closure of about a quarter of its stores. Many have closure programmes that tend to be modest. Merchandise is sold in 885 Toys "R" Us and Babies "R" Us stores in the United States, Puerto Rico and Guam, and in more than 810 global stores and over 255 licensed stores in 38 countries and jurisdictions. The closures will not take place until spring next year. Amazon and similar retailers are sucking share out of the traditional retail market'.
Up to 800 people could lose their jobs and Toys R Us said redundancies are likely. "Today's proactive measure better positions us to achieve these goals and ensures customers can continue to shop us with confidence over the Holiday season and beyond".
'Toys R Us has aisles and aisles stacked high with products, but they will never win that fight with the internet'.
It made an operating loss of £500,000 on sales of £418mln for the year to January.
Gary Grant, managing director of The Entertainer, the UK's biggest independent toy chain, said the store closures were awful news for the toy industry. Is the Great British high street dying? The stuff [toys] that are hot are hot, but the rest is mediocre'.