INVENTORY CLEARANCE SALES BEGIN IN ALL 142 FAO SCHWARZ, ZANY BRAINY, AND THE RIGHT START STORES
CALABASAS, Calif., (12/4/03) - Inventory clearance sales have begun in all 142 Zany Brainy, FAO Schwarz and The Right Start stores nationwide. The sales commenced after parent company FAO, Inc. (Nasdaq: FAOO), today filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware for itself and its operating subsidiaries ZB Company, Inc. and FAO Schwarz, Inc.
Subject to bankruptcy court approval, FAO, Inc. appointed a joint venture consisting of Calabasas, Calif.-based Buxbaum Group, LLC; Columbus, Ohio-based SB Capital Group, LLC; and Boston, Mass.-based Tiger Capital Group, LLC, as exclusive agent to conduct an inventory clearance sale in all three brands throughout the holiday season. Departments within Parisian, Carson Pirie Scott, Proffitt's McRae's, Boston Store, Bergner's, Herberger's, Younkers and Saks Fifth Avenue department stores, as well as in Borders stores will not participate in the event.
In an earlier release, the company said that the purpose of the Chapter 11 filing was to allow it to sell its FAO Schwarz and The Right Start businesses and assets, and to liquidate its Zany Brainy business (including leases) in an orderly manner. The company disclosed that, at the request of its lenders, it had engaged the liquidators to sell inventory of all three of its brands pending the outcome of its efforts to find buyers for the FAO Schwarz and The Right Start businesses, and close a transaction by December 15, 2003. The company stated that if a transaction was not completed by December 15, 2003, it could be required to accelerate the liquidation of those two businesses and sell remaining assets (including brands and leases) to conduct an orderly wind-up of its affairs.
The joint venture stated that, aside from the deals being offered through the sale on every item beginning Thursday, December 4, 2003, customers should not see any significant difference in operations at the stores as a result of the filing through the time its wind-down is completed early next year. Daily operations will continue, stores will remain open, and transactions that occur in the normal course of business will go on generally as before, though sales would be final.
"Coming within a week after the kick-off of the 2003 holiday season, this sale will offer discounts on every item in every store," said David Ellis, principal of Buxbaum Group.
"The sale creates a great opportunity for savings on famous brands, including Leapfrog, Playmobile, Lego and Barbie, as well as such treasured collectibles as Steiff Plush Animals and Madame Alexander Dolls, which are rarely seen on sale," noted Dan Kane, principal of Tiger Capital Group.
"This is truly a once in a lifetime opportunity to get across-the-board discounts on the high quality toy, hobby and educational products for which these three premier retail brands are known" added SB Capital principal Scott Bernstein.
All sales will be final during the inventory clearance sale, with cash and credit cards accepted. For a complete list of store locations, visit www.fao.com and click on the store locater for each brand.
Press Contacts: At Buxbaum Group, Paul Buxbaum, (800) 990-6820; at Parness & Associates Public Relations, Bill Parness or Lisa Kreda (732) 290-0121.