KB Toys Inc., the largest U.S. mall-based toy retailer, sold its Internet assets to investment firm D.E. Shaw for $7.4 million as it tried to emerge from bankruptcy protection.
D.E. Shaw, a New York-based firm that this year bought FAO Inc.'s FAO Schwarz stores in New York and Las Vegas, also will make royalty payments of at least $500,000 a year for the next three years, the firm said. The purchase includes inventory, equipment and the EToys trademarks.