The company filed for bankruptcy on December 11, 2008, and 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, down from its peak of 1,200 stores.