KB Toys Exits Chapter 11 in Time to Enjoy Holidays
KB Toys Inc. on Tuesday said it had emerged from bankruptcy protection before the key holiday selling season, led by management chosen by its new majority owner, PKBT Funding.
The emergence will give privately held KB Toys, which operates 640 mostly mall-based toy stores, a chance to participate in the increasingly cutthroat holiday toy shopping season.
“Parents are looking for products, and increasingly they are agnostic about where they get those products,” said Chris Byrne, an independent toy industry consultant in New York. “And with gas prices the way they are, they want to go where it’s easiest.”
KB Toys, based in Pittsfield, Mass., said Gregory Staley, a former president of Toys R Us Inc.’s U.S. and international units, was named KB’s president and chief executive. Roger Goddu, a former chairman and CEO of Montgomery Ward and a former president of Toys R Us USA, was named a director and a consultant.
Executives at KB Toys could not be reached to provide further details.
PKBT Funding is an affiliate of investment firm Prentice Capital Management.
KB had filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code on Jan. 14, 2004, after a dismal holiday selling period.
“KB hasn’t articulated a strategy about what they’re doing yet,” Byrne said, but it needs to stock “a lot of the hot toys.”
“It isn’t really a destination store, but the fact that they’re mall-based helps because parents are in the mall anyway,” he said.
KB and other toy retailers have struggled in recent years as discounters such as Wal-Mart Stores Inc. and Target Corp. have muscled in on their business, fueling price wars that also drove FAO Inc., parent of FAO Schwarz, into bankruptcy proceedings.
Toys R Us agreed in March to a $6.6-billion buyout by an investment group that includes Bain Capital Partners, Kohlberg Kravis Roberts & Co. and Vornado Realty Trust.
Also Tuesday, Hasbro Inc., the world’s second-largest toy maker, said Chairman Alan Hassenfeld would retire after 35 years from the company his grandfather founded 82 years ago.
Hassenfeld, 56, will continue as nonemployee chairman after he retires Jan. 1, the Pawtucket, R.I.-based company said.
Hassenfeld, who served as CEO from 1989 to 2003, was credited with expanding Hasbro overseas, which accounted for about two-fifths of the company’s $3 billion in sales last year.
Hasbro shares fell 17 cents to $20.13.
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Reuters and Bloomberg News were used in compiling this report.
