KB Toys, on the heels of filing Chapter 11 bankruptcy last week (see 'KB Toys Files For Chapter 11'), indicated in court papers that it will close roughly one third of its 1,300 retail outlets during its reorganization.  A minimum of 300 will be closed, with up to 115 more to be closed, depending on the willingness of landlords to renegotiate leases.

 

The bankruptcy court has given KB Toys the okay to take bids from liquidators to determine who will handle the sales associated with the store closings.  A stalking horse bid of approximately 42% of the value of the inventory to be liquidated has been received from a joint venture of Gordon Brothers Retail Partners and the Great American Group. 

 

KB Toys, hip deep in the trenches in the price wars with Wal-Mart (see 'Wal-Mart Applying Toy Category Kill Shot'), the largest toy seller in the country, in the end couldn't compete on small profit margins, as their sales volume, combined with many higher priced mall locations, wasn't large enough.