Car Toys, a car audio and accessories chain, filed for Chapter 11 bankruptcy on August 18, 2025. The company has plans underway to sell 35 stores to five buyers while continuing its operation during the court process. Selling these stores is part of its reorganization plan.
The bankruptcy petition was filed in the Western Washington Bankruptcy Court. In the petition, Car Toys has listed between $10 million and $50 million in assets and liabilities. Its 46 stores are spread across Oregon, Texas, Colorado, and Washington.
Why Car Toys Went Bankrupt
Car Toys has experienced financial decline for several years now. During that period, its sales from its car audio division have been dropping by between 8% and 10% annually since 2020. In 2022, it experienced a major blow when its affiliate, Wireless Advocates LLC, collapsed, and this led to the loss of an exclusive partnership with Costco. Car Toys was left to absorb overhead costs alone, and this accelerated its financial decline.
What Happens to the 46 Car Toys Stores?
Car Toys plans to sell 35 of its 46 stores to five different buyers as part of its bankruptcy reorganization. The move, which is worth about $13.75 million, is designed to prevent laying off its workers and keeping its brand operational in several markets.
Here is a breakdown of its five buyers and the stores that are on sale:
- Foss Audio and Tint: 8 Western Washington stores, 1 Portland store, and 6 Colorado stores
- Selway Sound (Aspen Sound): 2 Spokane, Washington, stores
- Don Longworth & Raul Shakarov: 5 Oregon stores
- Drive-In AutoSound: 1 Colorado Springs store
- Troy Parcels & Chris Pritts: 8 Dallas-Fort Worth stores and 4 Houston stores
Car Toys has not disclosed the plan it has with the 11 locations left.
Will my local Car Toys Close or Change its Name?
Whether your local Car Toys store will close or change its name will depend on its location and the buyer. At the moment, the aim is to ensure that the stores are running and that employees retain their jobs.
Since the court process is still underway, the final list of store changes will be confirmed later, as well as other buyer announcements. Therefore, expect new contracts to be signed, and changes in management at some locations. Other locations will continue to operate as usual without any notable change.
Car Toys Bankruptcy Puts a Clock on Gift Cards and Groupons
Car Toys has announced that it will be ending its gift card and Groupons programs as part of the bankruptcy reorganization plan. Therefore, going forward, there will be no new sales of gift cards. Additionally, all existing gift cards and Groupons will be valid until October.
However, future store owners may choose to accept them, but that decision is entirely on the respective buyers.
Next Steps for Customers and Communities
Due to reorganization plans such as the sale of some of the stores, customers and local communities will experience some changes. Here are a few steps you should take to avoid inconveniences and surprises:
- Check the official case site for updates and changes.
- Use credits before they become invalid.
- Call your local store and ask whether it’s among those on sale.
Conclusion
Car Toys will continue to operate despite plans to sell most of them due to bankruptcy. The sale is necessary to keep services going and ensure that employees retain their jobs at least while the court process is underway.
Customers who have gift cards and Groupons should consider using them early because they will soon be invalid. It is also important to stay up-to-date with court approvals and local announcements during the restructuring plan.