-- January 13, 2003
We've been telling you that the dismal holiday shopping season would mean lean times for the nation's retailers. For FAO Inc., parent company of FAO Schwartz and two other toy store chains, the worst holiday shopping season since 1970 sent it plunging into bankruptcy. Now, shareholders are going to pay the price!
FAO Inc.'s share price has been on the wane for the past year, falling from a high of $9.87 in April to a low of 25 cents today. That's a 97% drop in nine months -- a far cry from the stock that traded near $22 in December 1999. Less than a month ago, the stock was still trading at close to $2 as investors continued to hold out hope for a Christmas miracle. But with consumers finally beginning to rein in spending, FAO came up this season's big loser.
But they won't be the last. We expect many more bankruptcies to come in the retail sector as consumers continue to pare back spending.
related article: FAO Files For Chapter 11 Protection