Car Toys Inc., the longtime car audio and electronics retailer, has filed for Chapter 11 bankruptcy protection with plans to sell its assets to five different buyers across four states.
The Seattle-based company, once the nation’s largest independent car audio chain, filed its petition on August 18 in the U.S. Bankruptcy Court for the Western District of Washington. Court documents show Car Toys listed between $10 million and $50 million in assets and liabilities, with about $30 million in debt on the books.
Longtime Retailer Closing All 46 Stores
Founded in 1982, Car Toys grew into a 63-year-old household name with 46 stores across Texas, Washington, Colorado, and Oregon. But its reliance on car audio—which makes up nearly 70% of sales—proved to be a weakness. According to Chief Restructuring Officer Philip Kaestle of Sierra Constellation Partners, sales in this category have been slipping 8–10% annually since 2020.
“In 2021, we saw a brief boost from pent-up demand after COVID,” Kaestle explained. “But that success was short-lived.”
The numbers tell the story: revenue dropped from $127 million in 2021 to $123 million in 2022, then fell again to $113 million in 2023. By mid-2025, sales were down another 14% year-over-year.
The Costco Fallout and Affiliate Collapse
The company’s troubles deepened in 2022 when its affiliate, Wireless Advocates LLC, lost its exclusive partnership with Costco. The collapse of Wireless Advocates, which officially shut down in December 2022 and filed for Chapter 7 liquidation, left Car Toys shouldering extra overhead and management costs.
That loss, coupled with declining sales, forced Car Toys to cut 140 employees in 2024 and bring in restructuring advisers.
Who’s Buying Car Toys Stores?
Despite its struggles, Car Toys has secured agreements to sell 35 of its 46 locations for a combined $13.75 million through a Section 363 bankruptcy sale. Here’s the breakdown:
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Aspen Sound – 2 Spokane, WA stores for $477,536
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Drive In Sound – 1 Colorado Springs, CO store for $533,809
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Sound Distribution – 6 Colorado and 9 Washington stores for $1.138 million
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Don Longworth & Raul Shakarov – 5 Oregon stores for $1.522 million
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CTX Operating Co. – 12 Texas stores for $3.951 million
Creditors Owed Millions
Car Toys’ largest unsecured creditors include Pembroke Real Estate, owed $4.2 million in lawsuit debt, Kenwood Electronics, owed over $1.27 million, and Alpine Electronics, owed more than $612,000.
The End of an Era in Car Audio
For more than four decades, Car Toys specialized in car audio, alarms, video systems, window tinting, marine audio, and powersports accessories. But shifting consumer demand, mounting debt, and the collapse of its affiliate left the once-dominant chain with no way forward.
Now, with bankruptcy proceedings underway, the company’s familiar storefronts will soon carry new names—marking the end of an era for a brand that helped define the aftermarket car audio industry in America.