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By Sonya Rabbitte, 19 October 2001 17:02

NEWS Earlier this year e-tailer eToys suffered the humiliation of a bankruptcy buyout, but after re-vamping its infrastructure the online retailer's back in business for the Christmas season. The online toy seller - backed by buyer KB holdings, the third biggest toy retailer in the US - re-launched its site last week under the once familiar brand name eToy's. The company's partners include AOL and Netscape. The site, which was often pitched as a rival against giant retailer ToysRus, filed for bankruptcy last March despite a busy Christmas period in 2000 and was bought by bricks and mortar toy retailer KB Holdings in May for $3.35m. The deal included branding and inventory. Despite the fact eToys was heavily criticised last Christmas for delivery delays and under-stocking its warehouses, analysts seem confident that the new style eToys will perform better this season. David Schehr, an analyst at Gartner G2, said the backing of KB Holdings should iron out eToys previous fulfilment issues. "eToys is just a brand name, behind the scenes there is new packaging. Before they had to build its infrastructure. What KB can do now is leverage their existing infrastructure into this new channel," Schehr said. The pre-Christmas shopping season is the perfect time for a defunct e-tailer to resurrect itself and eToys is unlikely to be harmed by its nine-month absence, according to Forrester analyst Jaap Favier. "Toys are not an item that you replenish often, so I bet 80 per cent of their customers didn't even know they'd gone out of business, but they would be very stupid to just make a seasonal re-appearance. That will damage their brand name," he said. The site is currently delivering in the US only, but plans to expand operations are in the pipeline. eToys floated in May 1999 and was valued by the markets at $8bn on its first day trading.