KB Toys' winning bid for bankrupt
eToys' inventory is substantially less than a conditional bid of $8
million, later withdrawn, by children's book publisher
Scholastic for some of those assets.
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KB Toys said Thursday that it is purchasing "substantially
all" of defunct e-tailer eToys' inventory for US$5.4 million, as
part of eToys' bankruptcy proceedings.
KB Toys stressed that although the retail value of the
eToys merchandise is estimated to be $40 million,
KB Toys does not expect to sell the goods for near that amount.
"It was just a great opportunity for KB Toys," spokesperson
John Reilly told the E-Commerce Times. "We made very good buys
and will pass those savings along to our customers."
Although the eToys domain name was not included in this purchase,
Reilly confirmed that KB Toys had bid on the name and could
know within several weeks if its bid was successful.
KB Toys' winning bid for eToys' inventory
is substantially less than a conditional bid of $8
million, placed in March by children's book publisher
Scholastic, for some of eToys' assets in bankruptcy.
After reportedly winning the
bankruptcy auction, Scholastic
withdrew its bid hours later, saying that it had "concluded
that the acquisition of selected eToys assets did not meet
Scholastic's threshold for accelerating or reducing the costs
of its Web initiatives."
Coming Soon
Reilly said that KB Toys would receive the merchandise within
the next two weeks and that it would sell the toys,
collectibles, and other merchandise through its stores and the KBKids.com site.
Some of the eToys goods may even find their way
to KB Toys' business-to-business (B2B) site, KBWholesale.com,
which was launched
earlier this month. Reilly said that he was not sure
which stores would receive the toys, but commented that
the company was "not ruling anything out."
eToys' Story
The sale of eToys assets in bankruptcy comes after a
disappointing holiday season signaled the final curtain
for what one of e-commerce's brightest stars.
Launched in 1998, eToys' meteoric rise soon made the company one of the
most recognizable names in cyberspace. However, red ink spread across eToys' balance
sheet in 1999 and 2000, and the value of the company's stock sank.
After sales during the past holiday season failed to meet goals, eToys
slashed 70 percent of its workforce, or about 700 employees, in
January. A month later, eToys said that it would wind
down operations and lay off its remaining employees by the
beginning of April.
On March 7th, eToys filed for bankruptcy in U.S. Bankruptcy Court
in Delaware and put its assets -- including its inventory,
warehouses and customer database -- on the auction block.
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