KB Toys to liquidate
By Staff -- Gifts and Dec, 12/11/2008 9:38:00 AM
PITTSFIELD, Mass.—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 retail stores immediately.
The move was the result of a “sudden and sharp decline in consumer sales due to macro-economic concerns,” according to KB Toys vice president and comptroller Raymond Borst in the company's filing. In particular, he pointed to a nearly 20 percent drop in same-store sales between Oct. 5, 2008, and Dec. 8, 2008. In the previous eight months of its fiscal year, same-store sales had been up 0.36 percent.
"In light of, among other things, the erosion in sales, the Debtors reviewed their liquidity needs and investigated a number of potential alternatives to address their projected liquidity shortfall," Borst said in an affidavit supporting the move. "None of those potential alternatives, however, proved to be viable and thus, it became apparent that the liquidation of their retail-based operations through expedited and orderly going-out-of-business sales within chapter 11 was the best option for the Debtors to maximize the value of their business."
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.
I have to agree with some of the other former employees. Yes, the business model that Andy and the rest of HO ultimately did not work, however, parts of it were successful, provided that you had DSMs and RDs that were willing to think "outside of the box" to maximize sales potential. I can sit here & thump my chest like the others on the subject, but I'm not gonna do something that's been beaten to death. I've worked for KB Toys since 1998 ...had awesome selections of toys then...gradually noticed the shrinking numbers...didn't help the fact that most of the time we never really had a DSM or RD that actually cared about success...wasn't until the beginning of 2008 that we finally got a DM that cared, IMO.
David Cuff - 2009-03-19 17:21:00 EDT
James Jenson,
You don't know what your talking about.KB toys was so Top heavy in the executive Mgmt.dept. and this included Dsm's. who did NOTHING to help the hard working managers and staff in the field, caused this once great company to close.When your company is not making money the dsm's should stay at a motel 6 not the marriott.Give them 30 stores instead of 15 at $60'000 a year at least till things start looking up.(they never did a damn thing anyway).Now i'm out of a job because of suits that should have been in khakis and polos working thier butts off like the rest of us... Thanks buttknobs...
KB MGMT. - 2009-01-22 17:43:00 EST
You don't know what your talking about.KB toys was so Top heavy in the executive Mgmt.dept. and this included Dsm's. who did NOTHING to help the hard working managers and staff in the field, caused this once great company to close.When your company is not making money the dsm's should stay at a motel 6 not the marriott.Give them 30 stores instead of 15 at $60'000 a year at least till things start looking up.(they never did a damn thing anyway).Now i'm out of a job because of suits that should have been in khakis and polos working thier butts off like the rest of us... Thanks buttknobs...
We need a bail out plan from Presdient Bush for KB Toys! I hope all the employees are holding up and keeping positive thoughts. My heart is with you all and KB Toys is in my thoughts often. I just watched a video of a Kay Bee Toy television ad and those who made that no doubt couldn't fathom the thought that the company in less than 17 years would be gone.
James Jensen - 2008-12-17 23:40:00 EST
I've been with KB for 11 years, and a store manager for 7 of them, and I've never been through a fourth quarter like this one. No payroll for trucks, constant event changes, and tons of money wasted on signage. We worked 65 to 70 hours a week, because we took pride in our stores and loved our jobs, and it still wasn't enough. We were micro-managed by 2 people that didn't have a clue how to make each individual store successful. KB was successful when managers were allowed to manage, and didn't have to leave merchandise that didn't sell, in a prime spot because a picture showed it HAD to be there. It's a shame it has come to this. Thank you to all of the people that made KB an awesome place to work, and tried to keep our spirits up when we were so beaten down. Merry Christmas to Andy, I'm sure your family won't do without.
Chris - 2008-12-16 23:58:00 EST
I worked at Kay-Bee Toys for almost 5 years and everyone I worked with in the store was very "close-knit" and we all looked out for each other. I'm a big kid so it was fun being able to play with all the new stuff we got in and I had no shame in jumping on the bouncy-bounce we had in the store! Even after I left over a year ago whenever I was in the mall I would still stop in and see everyone. I still keep in touch with a few of my old bosses. I even remember shopping there as a kid. It's sad to see it go!
Erika E. - 2008-12-14 21:24:00 EST
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