eToys.com
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
eToys.com was an American online toy retailer founded in November 1997 as an Idealab company by Toby Lenk. It sold toys and children's products over the internet, aiming to become the premier family-oriented shopping site on the web. The company went public on January 4, 1999, becoming one of the emblematic stocks of the dot-com bubble before its collapse.
02 / eToys.com FAILURE REASONS
Failure reasons
eToys expanded aggressively during the dot-com bubble, including an $18 million, three-year online marketing agreement with AOL, but its costs outran its sales. A disastrous 2000 holiday season caused it to miss its projected sales figures, and it failed to find a buyer or rescue financing. With liabilities of about $274 million substantially exceeding any recoverable value, the company told investors its shares were worthless and filed for Chapter 11 bankruptcy protection in March 2001.
03 / EVENT HISTORY
Events in the structured record
- Asset restructuring
eToys filed for bankruptcy protection and announced the closure of its website in March 2001.
- Liquidation
A liquidation plan was subsequently confirmed for the former eToys entity.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
Carried about $274 million in liabilities as of January 31, 2001, which the company said substantially exceeded any proceeds achievable in a sale.
- 02
Filed for Chapter 11 bankruptcy protection on March 7, 2001, closed the eToys.com website around March 8, and terminated all employees; the company declared its shares worthless.
- 03
KB Toys acquired the bulk of eToys' remaining assets for about $5 million in March 2001; the eToys brand later changed hands again and was acquired by Toys R Us in February 2009.