ToyTime can't survive embattled sector; shuts down

Torrance, Calif.,-based ToyTime posted a message on its Web site saying the toy e-tailer, and its baby-product site, BabyTime.com, would no longer accept orders and encouraged those interested in buying its assets to contact the company. However, items that were purchased by yesterday would be shipped, the company said.

Repeated calls to Toytime over the last two weeks by CNET News.com were not returned.

"ToyTime.com and BabyTime.com would like to thank our customers for your support and patronage," the message read. "We could have never done it without you."

Although companies are going out of business in various areas of e-commerce, none has been hit harder than the toy sector. Paper-thin margins, grueling competition and investors' disillusionment with e-commerce has contributed to its quickly diminishing numbers.

Last month, Toysmart.com, a privately held toy e-tailer, in which Walt Disney owns a majority stake, called it quits. Viacom's Red Rocket, an online retailer of educational toys, ceased operations, citing difficulties in sustaining its business. KBkids.com announced employee departures and layoffs.

Last Thanksgiving, typically one of the biggest shopping times of the year, ToyTime managed to draw enough customers to break into the top five toy sites, according to market research firm Media Metrix. It followed the likes of industry powerhouses eToys.com and Toysrus.com.

The company entered the fray late, however, having debuted last September. By then, it was up against a crowded field filled with well-funded companies possessing more established brand names.