RIGHT START STORES NOW IN LIQUIDATION MODE, AS COURT REJECTS OFFER ON BUSINESS
CALABASAS, Calif. (12/24/03) -With a Federal Bankruptcy Court judge yesterday rejecting an offer for FAO, Inc.'s (FAOOQ.PK) The Right Start business, going-out-of-business sales have commenced at all 38 of the chain's stores. Inventory clearance sales had been under way at The Right Start since earlier this month, when parent company FAO, Inc. filed for bankruptcy protection.
In the meantime, going-out-of-business sales continue at FAO, Inc.'s 89 Zany Brainy stores, and store closing sales remain in place at the company's 15 FAO Schwarz locations. All sales are being conducted by a joint venture comprised of Calabasas, Calif.-based Buxbaum Group, LLC, Columbus, Ohio-based SB Capital Group, LLC, and Boston, Mass.-based Tiger Capital Group, LLC.
As previously reported, on December 4, FAO, Inc. 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. 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. At the request of its lenders, the company engaged the joint venture 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, 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. Negotiations are continuing on the sale of certain FAO Schwarz assets.
FAO Schwarz 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, are not participating in the liquidation sale.
All sales in the 127 stores being liquidated will be final, with cash and credit cards accepted. The liquidating stores will continue to accept gift certificates through January 11, 2004. 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 (818) 898-3900; at Parness & Associates Public Relations, Bill Parness or Lisa Kreda (732) 290-0121.