Search Continues for Certain FAO Locations
Bankrupt FAO Inc. was continuing efforts to sell its 38 Right Start stores and three FAO Schwarz locations as of Friday.FAO originally received an extension through Dec. 17 to remove the Right Start stores and three FAO Schwarz stores from liquidation proceedings. Though that deadline has passed without an extension, liquidators have not pushed the issue as FAO continues to seek a buyer for the stores.
FAO announced late Dec. 17 that it was reviewing offers to buy certain assets related to the FAO Schwarz business.
When asked to comment on reports regarding an offer for the New York flagship location, a source close to the company said, "it was an offer, not a contract, for its flagship location, among others. My understanding is that the other two are in Las Vegas and Los Angeles."
The source added that, "The company has confirmed that there are multiple interested parties for FAO."
The source also said that the Right Start portion of the business has received a $6.25 million bid from Hancock Park, a Los Angeles-based private equity firm.
"The Right Start bid was accepted by the [creditors'] committee. The judge ... has set a hearing date for Dec. 23, and at that hearing if anyone wants to outbid, they can," the source said.
A report in the New York Post said "two unidentified buyers" were negotiating for the three FAO stores. The Post also reported that real estate mogul Ben Ashkenazy planned to bid on FAO's flagship Fifth Avenue location as well as other leases.
Also expressing interest in FAO Schwarz is toy entrepreneur Ken Hakuta, who is known as "Dr. Fad" and is president of Tradex Corp., Washington, a holding company that includes his toy businesses. His co-investor is Ruth Owades, founder of catalogers Calyx & Corolla and Gardener's Eden. Hakuta is mainly interested in FAO Schwarz's online and catalog business and in obtaining the license for the FAO Schwarz trademark.
