01/30/04 — KB Toys in Goldsboro not on list

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KB Toys in Goldsboro not on list

By Sam Atkins
Published in News on January 30, 2004 2:02 PM

The KB Toy store in Goldsboro at Berkeley Mall is not on the list of stores that are expected to close after the company's Chapter 11 reorganization plan was approved Wednesday.

John Reilly, a spokesman at the company's headquarters, said that by Feb. 11, an additional 19 to 115 stores will be added to the list, so the Goldsboro location is not guaranteed to stay open.

Every store is being considered for closure, and a lot of different criteria are being used to decide on whether they will close, including store profitability and terms of the lease, he said.

The Goldsboro store's not being on the current list is a good sign and apparently means it is a performing store, added Reilly.

The company issued a press release on Wednesday stating that it plans to close at least 375 stores. The current list has 377 stores, including 16 throughout North Carolina.

The Pittsfield, Mass.-based company will cut about 3,500 jobs. It currently has 12,000 employees. It is restructuring to address financial challenges primarily from the price war during the 2003 holiday season, the release stated.

Michael L. Glazer, chief executive officer of KB Toys, said in a news release that the stores on the list are under-performing or do not fit the company's strategic plans. Closing them allows a further reduction in corporate overhead and regional operating costs, he added.

According to an Associated Press report, the company sought bankruptcy protection earlier this month, blaming the Christmas season's price wars and increased competition from larger chains like Wal-Mart.

U.S. Bankruptcy Judge Joel Rosenthal approved the company's plans Wednesday to close as many as 490 stores. The company stated that day that it might close fewer stores than that if landlords are willing to renegotiate leases.

The company hopes to emerge from bankruptcy protection before the 2004 holiday season.