Vendor: Peers jumped the gun on FAO nonpayments

“The Wall Street Journal” on Dec. 13 reported that at least two large suppliers of FAO have stopped shipping merchandise this quarter to the company’s FAO Schwarz, Zany Brainy, and Right Start toy stores and catalogs due to nonpayments from the New York-based marketer. But at least one major FAO supplier says the vendors jumped the gun.

“Every retailer we do business with occasionally has a slow pay,” says John Lee, president of Chicago-based Learning Curve, which owns several large toy brands including Lionel Trains, Lamaze, and Eden Toys. “For the last six months, FAO has been right on the money paying on time with us. And since we’re a fairly high-profile manufacturer in its mix, if there are any issues, I usually get inundated with calls from other manufacturers. So I believe this is more the exception than the rule and likely a couple of manufacturers who have specific axes to grind.”

FAO CEO Jerry Welch wouldn’t comment to the “Journal” on the matter due to the company’s quiet period prior to the Dec. 16 release of its third-quarter earnings. But a spokesperson said that “most” of FAO’s 350 vendors are “happy” to be suppliers to the marketer.

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