Coleco Industries Inc., which soared to the top of the toy industry in the mid-1980s with its Cabbage Patch Kids and then skidded into debt as the dolls' popularity waned, announced today it filed for protection from its creditors under Chapter 11 of the federal bankruptcy law.
Coleco lost $47.4 million in the quarter that ended April 2 and has suffered losses in four of the last five years, including $215 million over the last two years.
In recent weeks, Coleco has tried to raise cash by selling off some of its product lines, including the plastic wading and splashing pools and children's outdoor furniture lines that helped launch Coleco in the toy business in 1956.
Coleco also has slashed its work force in an effort to cut costs. It currently has fewer than 600 employees in the United States, down from an average of 2,500 last year.
Besides Cabbage Patch Kids, Coleco manufactures Alf dolls, Big Wheels plastic tricycles, and board games such as Scrabble.