The first retailer to file for bankruptcy in the wake of one of the weakest holiday shopping seasons in decades turned out to be an Internet company. The Parent Co. (Denver), an Internet retailer of children’s products, has filed for Chapter 11 bankruptcy protection along with nine of its subsidiaries, including eToys.
Chief executive Michael Wagner called the bankruptcy filing “an unfortunate but necessary and responsible step to preserve the company’s value for our stakeholders in light of the ongoing challenging retail environment.”
Like many retailers, the Parent Co. was hit hard by the freeze in consumer spending. To attract consumers during the Christmas shopping season, eToys offered up to 60 percent off more than 1300 toys and games, including brands like Hannah Montana, My Little Pony and TMX Elmo. eToys had already filed for bankruptcy protection once, in 2001, and its assets were bought by KB Toys Inc. (Pittsfield, Mass.) for more than $5 million. Then KB Toys filed for bankruptcy, in 2004. (It has filed again this month.)
The Parent Co. is majority owned by D. E. Shaw & Co. LP (New York). The company, which listed assets of $20.6 million and debt of $35.7 million, is seeking permission for a $10.9 million operating loan from a Shaw affiliate to keep operations running while it seeks a buyer.