KB Toys to Liquidate
By Playthings staff -- Gifts and Dec, 12/11/2008 10:59:00 AM
Pittsfield, MA — Toy retail chain KB Toys said today in a newly filed Chapter 11 bankruptcy petition that it plans to begin going-out-of-business sales at all of its stores immediately.
The move was the result of a “sudden and sharp decline in consumer sales due to macro-economic concerns,” according to the company’s court filings, and in particular pointed to a nearly 20 percent drop in same-store sales between Oct. 5 and Dec. 8. In the previous eight months of its fiscal year, same store sales had been up 0.36 percent.
In addition to closing its 277 mall-based stores, 40 KB Toy Works stores and 114 outlet stores, KB plans to sell its wholesale business, Creative Innovations & Sourcing, which supplies toys to retailers CVS Pharmacy and Supervalu, and home shopping network QVC. The company also operates 30 temporary "Holiday Stores."
KB employs approximately 4,400 full-time workers and more than 6,500 seasonal employees.
As of November 29, on a consolidated basis, KB Toys had assets worth approximately $241 million and total liabilities of approximately $362 million. The liabilities consist of approximately $127 million in senior secured claims (inclusive of approximately $29 million of outstanding letters of credit) and approximately $143 million of unsecured claims including, outstanding trade payables and other accrued liabilities, according to government documents. The retailer said it has annual sales of approximately $480 million.
A list of KB's largest creditors can be found here.
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