Bankrupt toy retailer/cataloger FAO on Dec. 26 signed an agreement to sell its assets to VGACS Acquisition, a subsidiary of DE Shaw Laminar Portfolios, subject to approval of the supervising bankruptcy court, thus averting a shutdown of its fabled Fifth Avenue store in New York, its Las Vegas store, and its catalog/Internet business, according to several news sources.
King of Prussia, PA-based FAO, however, has to sell the remaining inventory in the two stores. Then the stores will close temporarily and be reopened by the new buyer in the middle of 2004.
FAO has to ask the court to approve the deal or accept a better bid by January 22. FAO filed for Chapter 11 for a second time in December and said it would close all operations. The company has already liquidated 89 Zainy Brainy specialty toy stores. On Dec. 24, it agreed to sell its 34 Right Start baby products stores to Los Angeles-based private equity firm Hancock Park Associates, pending bankruptcy court judge’s order on Dec. 29.