Disney pulls plug to end struggles at e-tailer Toysmart

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Toysmart.com's abrupt shutdown this month brought an end to Walt Disney Co.'s play in toy e-tailing.

Disney in August bought a 61% stake in the educational toy site for $25 million in cash and $20 million in promotional services. Two months later, Toysmart began its holiday ad campaign via Arnold Communications, Boston. Toysmart spent $11.8 million on ads last year, according to Competitive Media Reporting.

Toysmart, however, has become a casualty of the consumer e-tail shakeout.

Toysmart tried to reposition itself as a business-to-business venture, but CEO David Lord said the Disney-backed board decided to cease operations when negotiations with investors for that restaging collapsed at the last minute.

Toysmart joins other recent e-tail casualties failures, including fashion retailer Boo.com and computer retailer CompUSA's Cozone.com.

Copyright May 2000, Crain Communications Inc.

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