<PAGE>
EXHIBIT 99.1
eTOYS RELEASES COST REDUCTION DETAILS
LOS ANGELES, January 4, 2001 - eToys Inc. (NASDAQ: ETYS) today provided details
of the cost reduction plan it announced on December 15 while it continues to
explore a range of strategic options for the future.
The company said it provided job elimination notices today to roughly 700 of its
approximately 1,000 eToys and BabyCenter employees. About 380 employees will end
their service to the company today and about 320 employees will end work by
March 31.
The company also announced plans to cease warehouse operations in the City of
Commerce, Calif., and Greensboro, N.C., during the next 30 to 60 days and said
it will consolidate those operations within eToys' existing distribution centers
in Ontario, Calif., and Blairs, Va.
The company also said it would close its United Kingdom Web site
(www.etoys.co.uk) on January 19 and fully wind down its European business
shortly thereafter.
eToys announced on December 15 that revenues for the holiday quarter would be
significantly less than earlier projections, due in large part to a generally
harsh retail climate and the continued disfavor of Internet retailing.
At that time, the company said that it had engaged Goldman, Sachs & Co. as its
financial advisor to explore strategic alternatives for the company, which may
include a merger, asset sale, investment in the company or another comparable
transaction or a financial restructuring.
Also at that time, eToys said it was in the process of reviewing its financial
projections for the fiscal year ending March 31, 2001 and periods thereafter. In
light of the lower-than-expected revenue growth experienced during the quarter
ended December 31, any information previously provided by the company with
respect to such periods should not be relied upon. Specifically, the company no
longer estimates that it will achieve profitability by its fiscal year ending
March 31, 2003, or that its quarterly loss will narrow year-over-year beginning
in the quarter ending December 31, 2000 and for all subsequent quarters, as
previously stated.
FORWARD-LOOKING STATEMENTS
STATEMENTS MADE IN THIS DOCUMENT THAT ARE FORWARD-LOOKING INVOLVE RISKS AND
UNCERTAINTIES THAT COULD CAUSE RESULTS TO DIFFER MATERIALLY FROM THOSE
EXPRESSED. SUCH RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO, THE
COMPANY'S EXPECTATION OF OPERATING LOSSES AND NEGATIVE CASH FLOW FOR THE
FORESEEABLE FUTURE. THERE CAN BE NO ASSURANCE REGARDING WHEN OR IF THE COMPANY
WILL ACHIEVE PROFITABILITY; WHETHER THE COMPANY WILL BE ABLE TO RAISE ADDITIONAL
CAPITAL WHEN REQUIRED OR THE AMOUNT OF ADDITIONAL CAPITAL THAT WILL BE REQUIRED;
WHETHER THE COMPANY WILL BE ABLE TO CONSUMMATE A STRATEGIC TRANSACTION ON TERMS
ACCEPTABLE TO IT OR AT ALL, OR WHETHER THE COMPANY'S PROPOSED WORKFORCE
REDUCTION WILL POSITIVELY IMPACT ITS FUTURE RESULTS OF OPERATIONS. OTHER RISK
FACTORS INCLUDE THE COMPANY'S LIMITED OPERATING HISTORY,
<PAGE>
UNPREDICTABILITY OF OPERATING RESULTS, SEASONALITY, INVENTORY RISK, RELIANCE
ON KEY VENDORS AND DISTRIBUTORS AS WELL AS THE COMPETITIVE MARKETPLACE. OTHER
RISKS ARE SET FORTH IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE
FISCAL YEAR ENDED MARCH 31, 2000, UNDER THE HEADING "BUSINESS - ADDITIONAL
FACTORS THAT MAY AFFECT RESULTS," IN THE COMPANY'S QUARTERLY REPORT ON FORM
10-Q FOR THE QUARTERS ENDED JUNE 30, 2000 AND SEPTEMBER 30, 2000 AND IN THE
COMPANY'S OTHER FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
Contacts: Media: Ken Ross, 310-998-6993, [email protected]
Gary Gerdemann, 310-998-6823, [email protected]
Investor: Clem Teng, 310-998-6312, [email protected]
