Toy inventor plans bid for FAO Schwarz
Move would scale down US toy retailer
December 12 2003
A US toy inventor is planning a bid for toy retailer FAO Schwarz which would rescue the toy retailer’s flagship New York store.
FAO Schwarz is currently facing bankruptcy for the second time in a year, and is seeking buyers for its core chain.
Liquidatiors have already begun the process of selling off the company’s Zany Brainy educational toy chain, which operates 89 stores in 27 US
Toy inventor Ken Hakuta, who created Wacky Wall Walker in 1983, has announced that he has put together $25m in financing, including $5m of his own money, in order to cherry pick the best of the 15 FAO Schwarz stores.
Hakuta also wants to acquire the FAO Schwarz name, He told newspaper USA today: “I would like to buy the flagship store on New York’s Fifth Avenue and one or two others, possibly Boston and Los Angeles. The old company is just beyond salvation financially, but the name is still a name of imagination and creativity.”
FAO Schwarz was taken over in 2002 by early-years toy retailer The Right Start, with the new owners later buying the Zany Brainy chain.
In a US market where discounters including Wal-Mart have made huge inroads into the toy market, FAO’s upmarket offer has continued to struggle. It filed for bankruptcy protection in January, emerging in April, but has now filed again.
Hakuta said: “What the new FAO Schwarz will have to do is represent fun on a grand scale and creative products that will not be found at Wal-Mart.”
The comoany has until next week to sell FAO Schwarz and The Right Start chain or start liquidation. The liquidation of Zany Brainy will see its leases sold by the end of January.
