because of poor sales at its mall-based locations, as well as competition, the company filed for chapter 11 bankruptcy on december 11, 2008. the chain began going-out-of-business sales that month. at the time, the company had 10,850 employees, including approximately 6,500 seasonal workers. the company had 277 mall locations, 114 kb toy outlet stores, 40 kb toy works stores, and 30 kb toys holiday stores, for a total of 461. it was the largest mall-based toy retailer in the united states at the time, operating in 44 states, as well as guam and puerto rico. it was also the second-oldest operating toy retailer in north america (behind fao schwarz) before its demise. the store-closing sales (as well as the termination of the company's website) were concluded on february 9, 2009.