KB Toys filed for bankruptcy protection yesterday, with plans to initiate closeout sales in the rest of its 277 remaining stores.

The 86-year-old specialty toy retailer, which has four stores left in Hawaii, cited a sudden decline in sales due to the poor economy.

Yesterday was also the day KB Toys advertised the launch of its four-day doorbuster price sale, which is expected to become a going-out-of-business sale.

KB Toys officials in Massachusetts could not be reached for comment yesterday. Store managers in Hawaii declined to comment.

KB Toys has a store at Kahala Mall, Windward Mall, and one at Prince Kuhio Plaza in Hilo and at Queen Kaahumanu Center in Kahului.

Jonathan Kim, manager of Windward Mall, said he had not been informed of any closures yet, and that the store was open regular hours yesterday.

KB Toys at Windward Mall was one of the stores in the chain selected to open its doors at midnight on Black Friday, he said, to huge crowds.

“;I just passed there, and it's business as usual,”; he said.

But sales at KB Toys stores fell 20 percent between Oct. 5 and Dec. 8 compared to last year, according to the bankruptcy filing.

KB Toys, which owes as much as $500 million to creditors and has assets valued at the same amount, will also try to sell its wholesale distribution business.

The news yesterday comes three years after the company exited bankruptcy by closing almost half of its 1,200 stores, along with a distribution center and its Web site. Prentice Capital Management Inc. acquired a majority stake in KB Toys at the time.

Three KB Toys shut their doors in Hawaii at about the same time last year - at Kamehameha Shopping Center in Kalihi, Pearlridge Center and Ala Moana Center.

KB Toys, a privately held company, has stores in 44 states, Guam and Puerto Rico. Besides KB Toys, the company operates KB Toy Outlet and KB Toy Works.

It's increasingly difficult for a specialized retailer to compete against big box stores, said isle retail analyst Stephany Sofos.

KB Toys was going head to head in Hawaii with Wal-Mart and Toys R Us. Target would be another competitor, although its doors don't open until next year.

“;In today's world, unless you're really aggressive, you're going to be killed by the Kmarts and Wal-Marts of the world,”; she said. “;You can't compete with the economies of scale of the larger stores, especially here, because shipping is expensive.”;

KB Toys has had a longtime presence in Hawaii dating back to at least 1985, when it opened at Kamehameha Shopping Center. It has been at Windward Mall for at least 10 years, according to Kim.

In an advertisement yesterday, KB Toys was offering a “;Buy 2, Get 1 Free”; deal for items ranging from Hannah Montana dolls to Playskool toys, transformers, and Nerf toys. The retailer was also offering a $25 bonus on Mattel and Fisher-Price toys with a customer purchase of $100 or more.

KB Toys also advertised its gift cards, but Sofos said she did not recommend buying one from a company in bankruptcy.

Other national retailers with stores in Hawaii that have filed for bankruptcy protection recently include The Sharper Image, Steve & Barry's and Circuit City Stores Inc.

“;It's just what happens in retail,”; said Sofos. “;There's a cycle of life. It's sad that (KB Toys) is going out, but Target's coming in, and Target will be selling toys, too.”;