Retailer KB Toys files for bankruptcy protection

[NFS4]

http://finance.yahoo.com/news/...-for-apf-13808415.html

NEW YORK (AP) -- In another sign of the grim holiday season, KB Toys filed for bankruptcy protection for the second time in four years on Thursday, joining fellow retailers Linens 'n Things and Steve & Barry's in seeking Chapter 11 protection amid the recession.

The retailer said in its filing in U.S. Bankruptcy Court in Delaware that it had debts between $100 million and $500 million and total assets in the same range.

That a toy retailer filed for bankruptcy just before Christmas shows how bleak things have become, since they make up to half of their sales during the holidays. But analysts expect toy sales this holiday season to either be flat or down slightly from last year, when they totaled $10.4 billion, according to market research firm NPD Group, because consumers are cutting back. In response, toy retailers have amped up their discounts.

KB Toys had aggressively cut prices to entice cash-strapped shoppers, offering hundreds of toys for $10 or less. It also expanded its value program, which offers deals on new items each week, to include video games and DVD movies.

But the company's debt overwhelmed its efforts. Vendors top KB Toys' list of unsecured creditors. The toy retailer owes Hong Kong-based toy manufacturer Li & Fung about $27.2 million, El Segundo, Calif.-based Mattel Toys $1.3 million and St. Louis-based Energizer Battery more than $728,000. Other creditors are Hasbro Inc. and the maker of Legos.

KB Toys did not immediately return a call for comment.

Pittsfield, Mass.-based KB Toys filed for bankruptcy in 2004 and emerged nearly two years later as a subsidiary of investment firm Prentice Capital Management. The more than 80-year-old company operates 460 stores.

Jim Silver, a toy analyst at timetoplaymag.com, said KB had been struggling since emerging from its first bankruptcy protection in 2005.

"Manufacturers were concerned about shipping to them over the last couple of months," he said. "This did not happen all of a sudden."

He said that the timing of the filing was a surprise, however, since he expected it in January. But as manufacturers balked at shipping "hot" holiday toys, their sales dropped off. KB Toys also suffered from deciding not to sell video-game consoles such as the Nintendo Wii, one of the few toy items selling well this year, Silver said.

"Their business model didn't work," he said. "They're selling closeouts, today people want the hot toys."

Amid the consumer spending slowdown and recession, KB Toys joins a growing list of retailers filing for bankruptcy protection. Others include Mervyns LLC, The Sharper Image, Steve & Barry's, to Linens 'N Things and Circuit City Stores Inc.

AP Business Writer Vinnee Tong contributed to this report.

 

[vshah]

i used to buy legos there

 

[SunnyD]

Again?

 

[Vehemence]

Whenever I'd go in there when I was young they'd think I was stealin shit. Take that, fuckers!

 

[ElFenix]

selling toys for full retail at specialty mall shops is not a recipe for success. heck, selling practically anything for full retail at specialty mall shops is not a recipe for success.

 

[Tiamat]

I thought they did this before? Also, I thought they were gonna disappear like 5 years ago, but I noticed there was one remaining at the local mall...?

 

[darkxshade]

When I step into a mall in a few months, there's going to be nothing but fast food restaurants left. :disgust:

 

[ponyo]

Originally posted by: SunnyD
Again?

Exactly, although it's not a surprise. They need to just liquidate this company and put everyone out of their misery.

 

[SunnyD]

Originally posted by: dNor
Whenever I'd go in there when I was young they'd think I was stealin shit. Take that, fuckers!

Weren't you?

 

[dmcowen674]

In the words of Arnold

"They won't be back" this time.

 

[Vehemence]

Originally posted by: SunnyD

Originally posted by: dNor
Whenever I'd go in there when I was young they'd think I was stealin shit. Take that, fuckers!

Weren't you?

Besides the point! :|

 

[TallBill]

Originally posted by: ElFenix
selling toys for full retail at specialty mall shops is not a recipe for success. heck, selling practically anything for full retail at specialty mall shops is not a recipe for success.

This, mom and pop stores got dominated by chain stores. Now chain stores are getting dominated by super stores and the internet.

 

[darkxshade]

Originally posted by: TallBill

Originally posted by: ElFenix
selling toys for full retail at specialty mall shops is not a recipe for success. heck, selling practically anything for full retail at specialty mall shops is not a recipe for success.

This, mom and pop stores got dominated by chain stores. Now chain stores are getting dominated by super stores and the internet.

And ultimately Al Gore owns the internet. You see where this is headed? :Q

 

[ivan2]

they should, their stores suck.

 

[TallBill]

Originally posted by: darkxshade

Originally posted by: TallBill

Originally posted by: ElFenix
selling toys for full retail at specialty mall shops is not a recipe for success. heck, selling practically anything for full retail at specialty mall shops is not a recipe for success.

This, mom and pop stores got dominated by chain stores. Now chain stores are getting dominated by super stores and the internet.

And ultimately Al Gore owns the internet. You see where this is headed? :Q

Shit, *unplugs ethernet cable*, it's to late... it's already taken over!

 

[theknight571]

The KB Toy Store that was by me seemed to only carry "crap" toys... very few of the big name brands.

Kinda like the Harbor Freight of the toy world.

 

[JohnCU]

i used to shop there as a kid used to love the smell of the store.

 

[amdskip]

They can't survive in a pricey mall setting. They might even consider becoming just a seasonal store.

 

[Pardus]

don't buy gift cards from them, if you have one, use it immediately, as it's now worthless.

 

[ScottyB]

They ran out of melamine and were forced to shut their doors. If only we weren't outsourcing our melamine production to Communist China....

 

[Zim Hosein]

Originally posted by: ActiveX
don't buy gift cards from them, if you have one, use it immediately, as it's now worthless.

Very good advice ActiveX! :beer:

Personally, I haven't purchased anything from KB Toys in years because their prices were way to high! :| Sucks for those that work there though especially during the holidays

 

[lokiju]

They can't compete with Toys R Us and online.

 

[mugs]

Originally posted by: ElFenix
selling toys for full retail at specialty mall shops is not a recipe for success. heck, selling practically anything for full retail at specialty mall shops is not a recipe for success.

Unless you're Apple.

 

[vshah]

Originally posted by: TallBill

Originally posted by: darkxshade

Originally posted by: TallBill

Originally posted by: ElFenix
selling toys for full retail at specialty mall shops is not a recipe for success. heck, selling practically anything for full retail at specialty mall shops is not a recipe for success.

This, mom and pop stores got dominated by chain stores. Now chain stores are getting dominated by super stores and the internet.

And ultimately Al Gore owns the internet. You see where this is headed? :Q

Shit, *unplugs ethernet cable*, it's to late... it's already taken over!

he's watching all your pron as we speak

 

[Vehemence]

Originally posted by: mugs

Originally posted by: ElFenix
selling toys for full retail at specialty mall shops is not a recipe for success. heck, selling practically anything for full retail at specialty mall shops is not a recipe for success.

Unless you're Apple.

:laugh::thumbsup: