Multiple sources, including Playthings and the Washington Post, are reporting that KB Toys will close around 150 of its 550 stores beginning this month; the company has not commented on the reports.  KB also closed one of its three distribution centers in October. 

It's looking like a tough holiday season for toy retailers, with competitive price-cutting early and deep (see 'Wal-Mart Starts War Early').   

KB Toys hasn't been the same since 2003, when an aggressive push by Wal-Mart on toys (see'Wal-Mart Applying Toy Category Kill Shot') was a factor forcing the company to seek Chapter 11 bankruptcy protection.  A drop to 400 stores would make the reduction in store count a full 2/3, from around 1200 in 2004.