US retailer KB Toys said Monday a bankruptcy judge approved a liquidation of the company that will lead to the closing of all of its 461 stores. The retailer filed for bankruptcy protection earlier this month, highlighting the bleak economic picture at the heart of the holiday shopping season.
Massachusetts-based KB, formed in 1922, had emerged from an earlier bankruptcy reorganisation in 2005. "While we are deeply saddened by the impending closing of our stores, we would like to thank our loyal customers by offering last-minute holiday savings on everything in the store," said Andy Bailen, the chief executive.
The company said it was hurt by "the downturn in consumer spending compounded by a tightening of credit sources." KB, which claims to be the largest US mall-based specialty toy retailer, cited liabilities of as much as 500 million dollars in the petition filed in US Bankruptcy Court in Delaware.
The largest creditor listed was Toy Island Manufacturing, a Chinese-based toymaker part of the Hong Kong-based Li & Fung group, owed some 27 million dollars. But Li & Fung said in Hong Kong that its actual exposure was approximately five million dollars, which it said was mainly commissions, and that most of the stated 27.2 million dollars may be owed directly to its suppliers.