Car Toys Navigates Chapter 11: Five Oregon Stores Up for Sale in Pivotal Auction

A familiar name in car audio and electronics, Car Toys, is embarking on a significant restructuring, with its parent company, Car Toys Inc. of Seattle, filing for Chapter 11 bankruptcy. This strategic move includes the intended sale of five key Oregon store locations, marking a pivotal moment for the aftermarket installer.

The affected Oregon stores, which offer everything from cutting-edge car stereos and remote starters to window tinting and detailing, are located in prime retail areas.

These include the Portland store at 1210 N. Hayden Island Drive, the Beaverton location at 12400 SW Canyon Road, Clackamas at 12670 SE 93rd Ave., Salem at 2625 Commercial St. SE, and Springfield at 1620 Mohawk Blvd. The company, which also operates under the monikers Audio Northwest and Mobile Sound, is seeking to sell these assets as a comprehensive package, encompassing inventory, furniture, fixtures, and equipment.

The bankruptcy filing in Delaware reveals a detailed plan for the sale, with a 'stalking horse bid' already in place.

An affiliate of the private equity firm Sound United LLC, a prominent player that also owns Car Toys' direct competitor Wireless World and Simply Mac, has submitted an initial offer of $6.5 million. This sets the floor for an upcoming auction, with a bid deadline slated for August 19, 2024, followed by the auction itself on August 21, 2024.

A final sale hearing is scheduled for August 27, 2024, where the fate of these retail strongholds will be determined.

Founded in Seattle in 1987 by Dan Brettler, Car Toys grew to become a significant force in the aftermarket automotive electronics sector. At its zenith, the company boasted over 70 stores across multiple states.

However, the bankruptcy filing indicates a current footprint of 46 stores and a workforce of 472 employees nationwide. In 2023, the company reported revenues of approximately $107 million, underscoring its continued, albeit challenged, market presence.

The decision to file for Chapter 11 comes as Car Toys has grappled with an evolving retail landscape.

Like many traditional retailers, it has faced intense competition from online giants such as Amazon and large electronics chains like Best Buy. Economic downturns and persistent supply chain disruptions have further exacerbated these challenges, creating a difficult environment for specialized brick-and-mortar operations.

This isn't Car Toys' first encounter with significant business adjustments.

The company previously owned Wireless Advocates, a wireless phone business that operated kiosks within Costco and military bases. Wireless Advocates ceased operations in 2023, indicating a broader trend of strategic divestment and adaptation within the parent company. The current bankruptcy and sale of its Oregon assets represent a concentrated effort to reorganize and secure a more sustainable future for the remaining operations, potentially under new ownership in key regions.