eToys Warns of Lower 3Q Results, Foresees Layoffs, Possible Sale or Merger

eToys(ETYS Quote) said Friday it expects wider losses for the fiscal third quarter than it had previously forecast on Oct. 30 due to weaker-than-expected holiday sales.

The Internet toy retailer also said it expects to announce a plan for layoffs in January and has retained Goldman Sachs to "explore strategic alternatives," including the sale of assets, a merger or a financial restructuring.

The Internet toy retailer said it anticipates sales for the quarter ending Dec. 31 of between $120 million to $130 million, down significantly from the $210 million to $240 million previously projected. This compares with sales of $106.8 million during the year-ago quarter. ...