NEW YORK (CNN/Money) - KB Toys Inc. said Monday it will hold off on making its December payment to toy and videogame vendors due to slack sales, according to a published report Monday.

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An announcement by the privately-held toy retailer that it is assessing its cash position and prospects for the coming year has also led some analysts to believe KB will soon close some of its stores, the Wall Street Journal reported.

KB Toys CEO Michael Glazer told the Journal his company is "in communications with its key vendors about the decision" and that "a slower than expected holiday shopping season" led to the move. Glazer declined to disclose how much KB owes its vendors, which include Hasbro Inc. and Mattel.

In the report, Glazer said the company has "a significant amount" of borrowing power thanks to a $100 million revolving credit line, according to people familiar with the matter, with a core group of lenders led by a unit of FleetBoston Financial Corp.

FAO Inc., the parent company for FAO Schwarz and the Zany Brainy chain, in early December filed for bankruptcy protection for the second time this year. The 141-year-old retailer first filed for bankruptcy in January before emerging from Chapter 11 protection three months later.

An early price war initiated by discounter Wal-Mart Stores Inc. (WMT: Research, Estimates) in late September, the paper said, cut into KB's sales, which stood at $1.7 billion for last year. Toys "R" Us Inc. (TOY: Research, Estimates) also blames price-competition as the reason for its wider-than-expected third quarter loss posted in November.