KB Toys, a Prentice Capital Management property, has filed for Chapter 11 bankruptcy protection, as weak holiday sales continue to threaten retailers this year.
This is the second time that KB Toys has filed for bankruptcy in the last four years. The stores will begin running going-out-of business sales at its stores immediately.
The Associated Press reported that the 86-year-old company attributed the bankruptcy to debt from a poor economy, quoting a company statement that said the bankruptcy was “directly attributable to a sudden and sharp decline in consumer sales.”
The toy retailer had been going after consumers with aggressive offers including toys for $10 and a “Buy 2, Get 1 Free” promotion, but the deals were not enough. According to AP, the filing in U.S. Bankruptcy Court in Delaware stated: “KB Toys said that between Oct. 5 and Dec. 8 sales in stores open at least one year, a key retail metric known as same-store sales, fell nearly 20%.”