Game over for KB Toys
Christmas did not come soon enough this year for retailer KB Toys.
Pittsfield, Mass-based KB Toys filed for bankruptcy last week, citing a 'rapid decline' in holiday season sales due to the global economic meltdown.
'The liquidity crisis is directly attributable to a sudden and sharp decline in consumer sales due to macroeconomic forces,' the firm said in a statement.
The toy retailer, which survived a 2004 Chapter 11 bankruptcy after being bought by private equity firm Prentice Capital Management in 2005, said the only option this time around was an 'expedited and orderly' liquidation.
KB said that while it managed to turn an 0.3 percent increase in same store sales during the first nine months of the year, it has been staggered by a 19.8 percent decline in same store sales since Oct. 5.
Immediately after the filing, going-out-of-business sales went up at the firm's 431 stores, which include 277 mall stores, 40 KB Toy Works stores in open-air malls, 114 outlet stores, and an additional 30 temporary stores opened for the holiday season.
On the West Coast KB operates 44 stores in California, four in Oregon, and three in Washington.
The liquidation will eventually shutter more than 2 million square feet of retail space.
The firm also said it would 'pursue the sale or other disposition' of its wholesale distribution business. KB, though its wholesale division, also operates the toy departments of other retail chains, including CVS Inc. and Supervalu Inc.
The liquidation will impact about 10,850 employees, which includes about 6,500 seasonal hires.
Founded in 1922, KB Toys in its heyday operated more than 1,200 stores.