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KB Toys to Close at Least 375 Stores

PITTSFIELD, MA-The retailer, which filed for bankruptcy protection two weeks ago, says it is the victim of increasing competition from mass merchants. It receives permission to closes at least 375 stores across the country.

By Naomi Grossman | Updated on January 29, 2004

PITTSFIELD, MA-KB Toys Inc., the locally based toy retailer, is closing at least 375 stores across the country as part of its restructuring efforts. The company filed for Chapter 11 bankruptcy protection two weeks ago. At the time, KB Toys said it had secured a $350-million senior secured debtor-in-possession financing facility from a lending group led by Fleet Retail Group Inc. After the closures, the chain will continue to operate more than 750 stores.

The company blames its financial woes on the price wars during the recent holiday season in which mass merchant’s used toys as loss leaders and increasing price competition during the rest of the year. Another toy retailer, FAO Schwarz, which is operated by FAO Inc., applied for Chapter 11 bankruptcy protection a month ago.

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