Store Closings Result in Sales Decline at FAO

Second-quarter net sales tumbled 49% at King of Prussia, PA-based FAO, the parent company of toys cataloger/retailer FAO Schwarz, children’s products cataloger/retailer The Right Start, and toys retail chain Zany Brainy. For the three months ended Aug. 2, sales were $46.3 million, compared with $90.0 million last year. The net loss for the quarter was $18.8 million, compared with a net loss of $18.2 million for the second quarter of fiscal 2002.

FAO filed for Chapter 11 bankruptcy protection in January; it emerged from bankruptcy three months later. As part of its restructuring, the company closed 111 stores, liquidated discontinued inventories, closed a distribution center, reduced administrative staff, and relocated administrative offices in New York and Los Angeles.