Lacroix files for bankruptcy, Toys ‘R’ Us acquires FAO
Posted: Thu May 28, 2009 11:35 am
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?
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?