The Parent Co. on Sunday became one of the first victims of the dismal holiday shopping season, as the owner of Internet retailers eToys and Baby Universe filed for Chapter 11 bankruptcy protection and announced plans to sell its assets at auction.

The downtown Denver-based company, which changed its name to the Parent Co. from Baby Universe this year, listed assets of $20.1 million and debt of $35.7 million in bankruptcy documents filed Sunday in Wilmington, Del. Net sales were about $20 million in the first half of fiscal 2008, compared with about $106 million for all of the previous year, court papers show.

Retailers have come under growing pressure as consumers curb discretionary spending due to the ongoing housing slowdown, eroding credit, the slumping stock market and unemployment concerns.

"This action is an unfortunate but necessary and responsible step to preserve the company's value for our stakeholders in light of the ongoing challenging retail environment," said Michael Wagner, CEO of the Parent Co., in a statement announcing the filing.

Parent Co. said it had about 946 employees at the beginning of December. Since then, it had reduced its work force to 103 people, including four independent contractors, at the time of the filing, according to court documents.

Nine affiliates, including eToys Direct, BabyUniverse, Dreamtime Baby, PoshTots, Gift Acquisition and My Twinn also sought protection. Parent Co. asked the court to jointly administer the cases.

Parent Co. is seeking permission to borrow $10.9 million from D.E. Shaw Laminar Portfolios LLC to help fund operations while it finds a buyer. It wants to borrow $3.5 million on an interim basis.

The 40 largest consolidated creditors without collateral backing their claims are owed $10.9 million.

The largest unsecured creditor is United Parcel Service, which is owed $3.1 million.

This is the second trip to bankruptcy court for eToys. The online toy retailer, launched in 1997 by former Disney executive Toby Lenk, was one of the superstars of the dot-com era before crashing and filing for Chapter 11 in 2001. EToys was later purchased by KB Toys and then sold to D.E. Shaw, which later merged the retailer with the Parent Co.

The Parent Co. had a troubled financial balance sheet long before the recession began in earnest. The company posted a loss of $19.1 million on sales of $106.5 million in the year ended Feb. 2, 2008. Operating cash flow was negative $13.4 million.

In the most recent quarter ended Aug. 2, the Parent Co. reported a loss of $7.6 million on sales of $9.9 million. Shares of the company tumbled 98 percent in the past 12 months to close at 10 cents Wednesday.

davisj@RockyMountainNews.com or 303-954-2514. Wire services contributed to this report.

The Parent Co.'s largest creditors holding unsecured claims:

1. UPS, $3.1 million

2. Quad/Graphics, $1.97 million

3. Zhejian Xinyun Wood Industry, $660,329

4. Step 2 Corp., $341,591

5. Google Inc., $267,466

6. Madd International, $249,503

7. WMK Walthers Inc., $216,839

8. Linkshare Corp., $216,569

9. Technical Traffic Consultants, $190,079

10. Tek Nek Toys Ltd., $180,607