KB REVIVES ETOYS WEB SITE.

Byline: Brent Hopkins Staff Writer

After a high-profile flameout, eToys lives again.

The dot-com shopping site, once the pinnacle of the Internet boom, ceased operations in early March as massive debts forced the company into bankruptcy. Thanks to a $3.35 million purchase of its name and Web site, however, it has been relaunched under the banner of KBkids.com, the online venture of chain retailer KB Toys.

Toy shopping Web surfers who visit the site are now sent automatically to KB's, which features a special eToys section devoted to its top selling items. The popularity of these, combined with the site's high-profile name, drew in KB, which was hungry to pick up the defunct company's customers.

``They certainly built one of the best online brands in a short time,'' said John Reilly, a spokesman for the Massachussetts-based KB. ``They were the most prominent retailer, so if people recall it and punch it in, they'll come to us now. We thought it was an excellent opportunity.''

Sales were never a problem for the Westside-based eToys, which racked up $131.2 million in its final quarter, reported in February 2001. This was up significantly from the year before, where it posted $106.7 million in sales. But soaring operating costs continually led to losses, and a disappointing holiday season cemented its fate. Citing outstanding liabilities of $274 million, it filed for bankruptcy in March and laid off all employees.

In late April, KB acquired $40 million worth of merchandise from the shuttered eToys, Reilly said, paying only $5 million for the material. The decision to acquire eToys' name was merely to drive traffic to KB's main site, not a revival of the original page itself.

``We are continuing to operate our Web site as KBkids.com,'' Reilly said. ``There is an eToys shop though, that showcases a lot of the products that were unique. It'll be there as long as it makes sense for us.''

Idealab, the Pasadena company that spawned eToys, hopes the deal will help it recoup at least a portion of its investment.

``We helped found the company and remained a major shareholder,'' said Teresa Bridwell, vice president of corporate communications for Idealab. ``I assume that whatever process they went through to liquidate the assets, this will come back to us as a shareholder.''

Interestingly, the KB deal isn't the only way that eToys has returned to the public eye. A mere four months after its demise, it has emerged as a nostalgic collectors item. Its promotional T-shirts and hats are sold on eBay as kitsch, and its original stock certificates are becoming a hot commodity. Though the stock itself traded at 9 cents before it was halted, the brightly colored, attractively designed certificates are selling for $139.95 on Scripophily.com, making them the most expensive of the dot-com category.

``EToys is definitely the most popular one,'' said Bob Kerstein, chief executive officer of the Virginia-based certificate retailer. ``EToys is truly representative of the dot-com era. It went sky high in opinion, then came crashing down. It's also one of the nicest certificates out there. There's not too many of them, because not too many people were issued them.''

Kerstein purchased 25 of the certificates in February, when eToys was trading near $1, and has resold fifteen to analysts and attorneys hunting for souvenirs, making a tidy $138 profit on each.

``I'm a big believer in the dot-com world,'' Kerstein said, his voice laced with irony.