LIHU’E — KB Toys, the nation’s No. 2 specialty toy retailer, will be closing its Lihu’e location at the Kukui Grove Center in approximately 30-60 days.
KB Toys filed for Chapter 11 bankruptcy protection earlier in January and is closing its other Hawai’i store on O’ahu as well.
“KB Toys and its concept are outdated,” said Kukui Grove Center General Manager Wade Lord. “They’ve been struggling as a chain for quite some time. They’re competing against the likes of Walmart, Kmart and Toys R Us, and have done little to adapt to competition.”
“Their corporate bankruptcy and pending closure of 30 percent of their stores was not unexpected.”
According to KB Toys officials, the company is in the process of restructuring and will close 375 of its 1,217 stores nationwide. By February 11, the Company will identify an additional 19 to 115 stores for closing. KB Toys said it expects to sell up to $122.5 million of inventory through the store-closing process.
“Closing these stores is a major step in KB Toy’s restructuring process,” said Michael L. Glazer, chief executive officer of KB Toys, Inc. “These stores are underperforming or do not fit with KB Toys’ strategic plans. “Closing them also allows us to further reduce our corporate overhead and regional operating costs.”
As a result of the store closings, KB Toys said it will reduce its employment level by approximately 3,500 positions from the current level of approximately 12,000 positions.
There are nine employees at the KB Toys store in Lihu’e.
“Fortunately, there are ample retail opportunities for their (KB Toys) Kukui Grove employees,” said Lord. “I don’t think they’ll have any problems finding employment elsewhere.”
Lord added that there will be plenty of prospective bidders for the new space vacated by KB Toys.
“We look at this as an opportunity to enhance our tenant mix with an operator who is more in tune with our customer’s needs and is better able to adapt to changing market trends,” said Lord. “Our leasing team is already working with interested parties.”
According to Glazer, KB Toys is restructuring to address financial challenges created primarily by the price war during the 2003 holiday season, mass merchants’ increasing use of toys as loss leaders during the holiday season, and increasing price competition in the toy market during the remainder of the year.
Business Editor Barry Graham may be reached at 245-3681 (ext.) 251 or mailto:bgraham@pulitzer.net
