View Full Version : FAO SCHWARZ Going Bankrupt?
12-26-2002, 12:44 PM
As a keen watcher of the US economy, I am picking up all kinds of signs that say that this recession isn't ending anytime soon! The latest: FAO SCHWARZ (the 109 year old toy chain) is in serious trouble, and will likely go bankrupt! You would think that a well established, well-managed chain like this would be able to ride out this recession..but it looks like not! What does this say about the rest of the economy? Will this recession continue on into 2003?
This is NOT a good sign...anybody know when things will turn positive?:confused:
12-26-2002, 12:48 PM
All I can say about FAO is that with two kids, I have never purchased ANYTHING there. Their prices have always been exorbitant compared to nearby stores, their selection has been marginal, and their "limited edition" and "special" toys never seemed either limited or special enough to warrant purchasing.
They had nice stuffed animals but when the FAO near me closed last year, I noticed it as only one less place in the mall to wander through with the kids to get ideas for...I guess that doesn't pay the bills.
Troy McClure SF
12-26-2002, 02:13 PM
I like the giant Millenium Falcon hanging from the ceiling in the San Francisco store. Alas, it won't be there through February, since they're closing 70 of their stores to hopefully avoid bankruptcy.
12-26-2002, 02:57 PM
Bah, good riddens! I admit that they were all very pretty stores, but their prices were outrageous. They had become one of those awful places that thought that they could charge you 30% more for the honor of shopping at a FAO Shwarz store and not some lowly WalMart. It is a shame to see any company hit hard times, but it will hopefully give them a good ego check that will have to corp come bouncing back in a few years.
I look forward to the same thing happening to LEGO.
12-26-2002, 03:21 PM
I always viewed FAO Schwartz as kind of a tourist attraction. When I'm bored I sometimes go to the NYC one to stare at the giant lego sculptures.
But I've never bought anything there.
What has been going on economically (FtG's take: non-tech area).
We had a long period of economic good times. Companies kept expanding and expanding. Soon, badly managed (Err. "really badly managed." Almost all companies are merely "badly managed.) companies became addicted to growth. The growth stops. Uh-oh.
In case like FAO-S., they appealed to high end folk who really having been hitting it big the last 20 years. When the bad times come, it's shake out time. Some companies in each sector have to go bye-bye now. Just because you were successful 20 years ago doesn't mean you should still exist next year. Time to thin the herd. This will make the economy stronger in the long run. (Bailing out failing companies is usually not a good idea.)
Then, and only then, will the cycle begin again as the remaining businesses expand into the space left by their failed competitors. Since we had an unusually long and strong up period, plan on an extended down period.
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