FAO Schwarz Emerges From Bankruptcy

Last week, thinks looked bleak for FAO Schwarz. Still in bankruptcy court, FAO Schwarz petitioned the U.S. Bankruptcy Court for permission to close ALL of its remaining stores, including the Landmark 5th Avenue store in New York City and the 2-story store in Las Vegas if they could not find the funding to come out of bankruptcy.

Well, FAO did it--as of today, April 23, 2003, FAO has emerged from bankruptcy, 100 days after it sought protection from creditors. FAO Schwarz has struggled to compete with the Wal Marts of the world--stores that compete solely on price without added service or any type of traditional toyland displays.

I'll spare you the financial details--thanks to a convertible stock deal and a $77 million loan to cover operating expenses, FAO Schwarz will live another day to sell Barbie dolls and Legos. The first priority of FAO right now, according to a statement released today, is to resupply its stores. This is great news for doll specialty manufacturers and FAO Schwarz customers.

I am still distressed about the earlier closings of many of the FAO Schwarz stores, including the landmark San Francisco store--you can read my musings about that here: FAO Schwarz, The Demise of A Legend

Also, we're discussing this news in the Doll Collecting Forum today--please join us.