The Auto Parts Company That's Filing For Bankruptcy After A 4-Decade Run
Car Toys, Inc., a car audio and electronics retailer that first opened in 1987, filed for Chapter 11 bankruptcy on August 18, 2025. The company, with locations in Washington, Oregon, Colorado, and Texas, has between $10 million and $50 million in assets and liabilities and hopes to keep the business open while it works through its financial problems, and attempts to reorganize. It also plans to sell 35 of its current stores to new owners — including veteran managers and established regional audio chains — while clearing debt.
Car Toys, Inc. is one of several well-known car related companies to file for bankruptcy in 2025. With another recent example including AAMCO, the auto repair chain, whose bankruptcy came with unclear reasons. The first-day hearing for the car audio retailer was on August 22, while the Section 341 meeting of creditors is set for September 17. These early court filings cover routine requests, such as letting Car Toys use its cash, pay employees, and keep the lights on during the bankruptcy process — just some of the many things that happen when you go bankrupt.
Why now, and who is affected
Car Toys filed for Chapter 11 because its business changed after a short rebound. In a statement to the court, Chief Restructuring Officer Philip Kaestle explained that Car Toys had strong sales in 2021 after the pandemic, as more people wanted car electronics and installations. However, Kaestle also said that revenue fell for three years in a row after that, from about $127 million in 2021, to $123 million in 2022 (down 3.3%), to $113 million in 2023 (down another 8.3%). By 2024, revenue dropped to just $98 million. By mid-August 2025, Car Toys reported just over $52 million in gross revenue for the year.
A WARN Act notice filed with the Washington State Employment Security Department says the bankruptcy will impact 177 Car Toys employees, and that the company expects cut jobs beginning on October 20, 2025, while its stores are transferred to new owners. Car Toys also plans to stop accepting gift cards and Groupon vouchers after October 18, 2025, although each new owner can decide whether to honor them or not. Locations in Washington, Oregon, Colorado, and Texas are expected to stay open through the transition.
Thirty-five stores to five buyers across four states
The plan to sell Car Toys' stores covers 35 out of its current 47 locations, and involves five buyers in four states. According to Car Toys, Foss Audio & Tint will take over six stores in northern Colorado, eight in western Washington, plus an upfitting facility in Portland, Oregon. Two longtime Car Toys executives, Troy Parcels and Chris Pritts would buy eight stores in the Dallas–Fort Worth area, as well as all four stores in Houston. Two more Car Toys veterans are set to buy five Oregon stores, while Drive-In Autosound will take over a Colorado Springs location and Selway Sound (Aspen Sound) will take over both Spokane, Washington stores.
These sales still need court approval, and the total combined purchase price for these 35 stores is $14 million, according to CoStar. From this mix of buyers, it is clear that Car Toys is breaking up its store network into regional groups led by longtime employees and established competitors in Washington, Oregon, Colorado, and Texas. This setup will allow experienced staff to stay in place, better serving longtime local customers. By spreading sales across five different groups, Car Toys can give the business a better shot at staying open in each region and potentially come roaring back, like some companies have, after bankruptcy.