K-B Toys (Pittsfield, Mass.) will spend $5.4 million to purchase nearly all the inventory of the bankrupt Internet toy retailer, eToys.com. The company plans to sell the inventory, valued around $40 million, at a discount through its outlet and retail stores, as well as online.
“We are pleased with the outcome of this proceeding and look forward to passing these values on to our customers,” Michael Glazer, K-B ceo, said in a statement.
After holiday revenue fell far short of expectations, eToys announced that it was running out of cash and would close shop by the spring unless it had a cash infusion. The company laid off all of its 1000 employees in two separate job cuts in January and February, and filed for Chapter 11 bankruptcy last month.
K-B Toys is the country's Number Two toy chain, with 1350 stores. The stores operate under four different formats: K-B Stores in malls, K-B Works in strip centers, K-B Toy Outlets in outlet malls, and K-B Toy Express in malls selling closeout toys during the Christmas season. Division Kbkids.com also sells toys online. Formerly a subsidiary of Consolidated Stores, K-B Toys was purchased by its executives and taken private in late 2000. Last May, its Kbkids.com unit fired the ceo and laid off 30 percent of its work force.
K-B expects to receive the eToys inventory within the next two weeks.