FAO to File for Bankruptcy Again (Toy Store Bankrupt in Xmas Season!)

Beetwasher

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Tue Dec-02-03 04:09 PM
Original message

FAO to File for Bankruptcy Again (Toy Store Bankrupt in Xmas Season!)

Edited on Tue Dec-02-03 04:11 PM by Beetwasher

http://news.moneycentral.msn.com/breaking/breakingnewsarticle.asp?feed=OBR&Date=20031202&ID=3157192

CHICAGO (Reuters) - FAO Inc., parent of the legendary upscale FAO Schwarz toy stores, said on Tuesday it would file for Chapter 11 bankruptcy protection for the second time in less than a year.

--snip--

The retailer said last month that early holiday sales were much worse than expected and if sales did not pick up, it would not have enough liquidity to operate its business normally.

--snip--

If a toy store is having this much trouble at this time of year, things are bad...

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DS1

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Tue Dec-02-03 04:12 PM
Response to Original message

1. especially since they cater to Bush's tax-cut bracket

:bounce:

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xxqqqzme

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Tue Dec-02-03 04:15 PM
Response to Original message

2. this is just tragic

especially since squatter is claiming HIS economic recovery is going so spendidly.

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cally

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Tue Dec-02-03 04:20 PM
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3. I've never understood how this toy store made it

They charge high prices for goods that you can get at other toy stores. They have nothing special or unique to offer. The small, local toy stores can survive by offering unique and less corporate toys but FAO do not offer those. Good riddance.

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kysrsoze

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Tue Dec-02-03 04:44 PM
Response to Reply #3

5. Precisely. The rest of us shop at Target and Toys R Us.

I was in NYC during college (before they opened the now-closed Chicago store), and an FAO employee yelled at me for picking up a toy that had stopped working! Nothing was on sale and the regular prices were at least 20% higher than everywhere else - an elitist toy store.

Other than being a backdrop for Tom Hanks movies, FAO sucks!

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soothsayer

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Tue Dec-02-03 04:25 PM
Response to Original message

4. If stores are closing, it means the economy is booming!

Isn't that how the bfee logic goes?

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RebelOne

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Tue Dec-02-03 04:52 PM
Response to Reply #4

6. Yes, that is a good sign that the economy is booming.

Just shows how the tax cut has helped out.

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Fovea

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Tue Dec-02-03 05:03 PM
Response to Reply #4

8. People hate them for their freedom

Certainly not because their attitude and prices suck, oh no, not that!

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stevedeshazer

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Tue Dec-02-03 04:55 PM
Response to Original message

7. Having worked in this area

It's not surprising at all.

It's still early in the buying season. Retailers have to have enough cash on hand (or the ability to borrow it) before the season in order to have enough inventory on hand to satisfy demand. It's always a guess.

If they are stuck with inventory that isn't moving, they won't have the cash flow to pay the bills incurred 90 days before now (it's the first of the month), so retail sales must be weak, plus FAO's buyers must have overestimated demand.

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