Toy retailer KB Toys Inc. on Wednesday filed for bankruptcy on the heels of a soft holiday shopping season wrought by harsh competition from bigger rivals, according to court papers.
KB, controlled by the private investment firm Bain Capital, is the second major toy chain to fall into bankruptcy in about the past month. FAO Inc., parent of the iconic FAO Schwarz toy-store chain, in December filed for Chapter 11 bankruptcy protection for the second time in a year.
KB filed its Chapter 11 petition in the United States Bankruptcy Court for the District of Delaware.
The holiday period is usually the big money maker for toy retailers, but this latest season brought severe competition as Wal-Mart Stores Inc., Target Corp. and other major players slashed prices to lure customers.