Parent company goes under

INTERNET peddler of kiddies' gear, Parent Company has the distinction of being the first major flop com of this recession.

The outfit has filed for Chapter 11 bankruptcy protection along with nine of its subsidiaries, including eToys. Normally retailers do not give up until January or February.

The chief executive of the Parent Company, said the move was "an unfortunate but necessary and responsible step to preserve the company's value for our stakeholders in light of the ongoing challenging retail environment."

The New York Times claims that, during the next 24 months, there will be a fourfold increase in the number of retailers that do not have enough working capital or are unable to finance their debt. It is not clear how many of these will be online retailers.

Parent Company did its best in the run up to Christmas, eToys offered up to 60 percent off more than 1,300 toys and games, including brands like Hannah Montana, My Little Pony and TMX Elmo.

This is the second time that eToys has faced Chapter 11. It went under during the last dot.com crash in 2001. Its assets were bought by KB Toys, one of the nation's biggest toy retailers, for more than $5 million. Then KB Toys went bankrupt in 2004, got out of it and filed again this month. µ