KB Toys Emerges From Bankruptcy
NEW YORK – KB Toys Inc. (search) Tuesday said it emerged from bankruptcy protection before the key holiday selling season with new management chosen by its new majority owner, PKBT Funding LLC (search).
The emergence will give privately held KB Toys, which operates 640 toy stores, mainly in malls, 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, a toy industry consultant. "And with gas prices the way they are they want to go where it's easiest."
Pittsfield, Massachusetts-based KB Toys said said Gregory Staley, the former president of Toys R Us Inc.'s (TOY) USA and international divisions, was named president and chief executive officer. 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.
Staley resigned as president of Toys R Us' U.S. toy unit in January 2003. Goddu became chairman and CEO of Montgomery Ward in 1996 after his tenure at Toys R Us. KB Toys could not be immediately reached to provide further details .
Pittsfield, Mass.-based KB Toys 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, but need to stock a lot of the hot toys," Byrne said. "It isn't really a destination store but the fact that they're mall-based helps because parents are in the mall anyway."
KB Toys and other toy retailers struggled in recent years as discounters including Wal-Mart Stores Inc. and Target Corp. muscled in on their business, fueling price wars that also drove FAO Inc., parent of FAO Schwarz, into bankruptcy. FAO Schwarz has reopened two stores and also sells toys through its catalog and on its Web site.
Toys R Us was recently purchased by an investment group including Bain Capital Partners LLC, Kohlberg Kravis Roberts & Co. LP, and Vornado Realty Trust in July.
PKBT Funding is an affiliate of private equity firm Prentice Capital Management LP.