Lacroix files for bankruptcy, Toys ‘R’ Us acquires FAO

[Newsbot]

Fashion company Christian Lacroix SNC said it filed for the equivalent of a U.S. bankruptcy in Paris after continued losses and efforts to sell the company were unsuccessful.

The fashion house hasn't turned a profit since its creation 22 years ago, Dow Jones News Service reported.

Christian Lacroix's U.S. owner, the Falic Group, has been trying to sell a stake in the company for a year.

In a statement, Christian Lacroix Chief Executive Nicolas Topiol said efforts to sell a stake in the company were "directly hit" by the worldwide recession.

The statement said Falic would continue financing the fashion house until a suitable buyer was found. Its retail locations include one at the Forum Shops.

The New York Times, quoting people with knowledge of the situation, said Lacroix was badly hit in the United States, where it also has a store in New York, as buyers have recently reduced or canceled orders.

As Americans spend less on upscale goods, they are turning to bargain brands to save money during the recession. The Times said ready-to-wear sales for Lacroix for the autumn season were down 35 percent and losses for 2008 were about $14 million.

Separately, Toys "R" Us Inc. of Wayne, N.J., today announced it acquired FAO Schwarz including the big FAO Schwarz stores in New York and in Las Vegas at the Forum Shops. Terms were not disclosed.

"We have enormous respect for the FAO Schwarz brand and for the special place it holds in the hearts of children everywhere," Jerry Storch, chairman and CEO of Toys "R" Us, said in a statement. "Building upon this storied tradition is a responsibility we take very seriously. We will work tirelessly to preserve the distinctiveness and integrity of the FAO Schwarz stores and brand as we grow the business and, indeed, take the brand to even greater heights."

Following the acquisition, Toys "R" Us will continue to operate the two FAO Schwarz retail stores as well as the FAO Schwarz e-commerce and catalog operations.

"This acquisition allows us to grow our toy specialist market share and draw upon the unique strengths of both brands in developing quality products that differentiate us from our mass market competitors," Storch said. "To that end, we look forward to working together with the expanded universe of respected FAO Schwarz manufacturers and other valued partners, while developing innovative and quality product offerings. We are committed to providing the loyal clientele of FAO Schwarz with the unique shopping experience they have come to expect."

How was the company still in business after 22 years if it never made a profit?

[anarky]

TRU bought FAO? WTF?

How long until FAO becomes TRU? They may say they're preserving it, but they never do.

[Ran]

Is New York, Las Vegas and the online store all that is left of FAO? A couple times a year we take the kids to FAO at Caesar's. I don't know what it is, but if we are in the toy section at Target or at TRU, they will see something and say they want it for their birthday or Christmas. They never ask for anything at FAO, they just enjoy looking.

With TRU taking over, can you imagine what kind of shipping rates they are going to have on the FAO stuff?

[Jargo]

but does it mean TRU are going to be willing to take big motherfucking items as exclusives for sale through FAO such as the sail barge or whatever? surely that's the best route for such items now.

[Ran]

Good point. How big would the Sail Barge be compared to the Millennium Falcon? Could they pull it off at a similar size and price?

[anarky]

Everyone should just shut up about the Sail Barge. We have most of the characters for it, and an upcoming figure with a cannon designed to snap onto it, so, of course, they're not going to make it.

I'm not being sarcastic. They won't make it. Too many people want it.

[Senor JabbaJohnL]

The FAO Schwartz in New York City was fucking ridiculous; everything in there was super high-end, with a ton of shit priced well in the thousands of dollars. I remember liking the one at the Mall of America in Minnesota, which used to have a ton of Star Wars stuff, but I don't know if it's still around. Did they all turn into high-end places or what? I can't imagine they'd be doing well if they did (and clearly, they are not doing well).

[vynsane]

Did they all turn into high-end places or what? I can't imagine they'd be doing well if they did (and clearly, they are not doing well).

the NYC store was always like that. the rest... i have no idea. there was one in 'the mall' near my hometown, but it was like a normal toy store. it went out of business and apple moved in, though.

[Ran]

My wife's friend is in town, so we went to Caesar's Palace yesterday. FAO was in sad shape. The 3rd story is closed. The 1st floor used to have only the candy store and tons of stuffed animals of various sizes. Now there were Transformer toys right when you walked in. They had SW things before, usually higher end stuff, but it never anything from the 4" line. The SW basic figures had a $9.49 price tag on them. More importantly, the giant piano keyboard that was on the 2nd floor is gone. There are some arcade games in its place. The train set displays were gone. It looked like they got rid of at least some of the imported toys. You can certainly tell Toys R Us took over.