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CNN Live At Daybreak

FAO Schwarz Does Not Own Rights to Name

Aired December 05, 2003 - 06:47   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


CAROL COSTELLO, CNN ANCHOR: Time for a little 'Business Buzz' now. What's in a name? A lot if you are FAO Schwarz.
Carrie Lee explains from the Nasdaq market site.

Good morning -- Carrie.

CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Good morning, Carol.

Well, we talked about this earlier in the week, FAO filing for bankruptcy for the second time in a year. And now "The Wall Street Journal" is reporting that the troubled toy company's most valuable asset, it's FAO Schwarz name, isn't its own to sell.

Now FAO filed for bankruptcy, as we said, but the company actually licenses the FAO name from a foundation set up by heirs of FAO Schwarz' founder. And this agreement appears to give the foundation the right to block a transfer of the name, if the buyer doesn't meet the foundation's standards. So just another roadblock for FAO at this time.

Meanwhile, in New York yesterday, uptown a little bit on Fifth Avenue, at the flagship store, everything in the store was 10 to 20 percent off of the lowest price. Trying to liquidate. And here is the cover story of today's "New York Post." You can see the soldier there trying to keep a smile on his face.

Basically what the company is trying to do is sell its FAO Schwarz, as well as its Right Stuff line. They are trying to find a buyer by a December 15 deadline, liquidate Zainy Brainy. And now that there are some problems with the ownership rights, Carol, they may have a problem in doing that. So that is the latest on FAO.

Meanwhile, people probably running to that store, lining up now to try to get some lower priced goods.

COSTELLO: What's bad for them is good for consumers.

Carrie Lee live from the Nasdaq market site.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com






Aired December 5, 2003 - 06:47   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Time for a little 'Business Buzz' now. What's in a name? A lot if you are FAO Schwarz.
Carrie Lee explains from the Nasdaq market site.

Good morning -- Carrie.

CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Good morning, Carol.

Well, we talked about this earlier in the week, FAO filing for bankruptcy for the second time in a year. And now "The Wall Street Journal" is reporting that the troubled toy company's most valuable asset, it's FAO Schwarz name, isn't its own to sell.

Now FAO filed for bankruptcy, as we said, but the company actually licenses the FAO name from a foundation set up by heirs of FAO Schwarz' founder. And this agreement appears to give the foundation the right to block a transfer of the name, if the buyer doesn't meet the foundation's standards. So just another roadblock for FAO at this time.

Meanwhile, in New York yesterday, uptown a little bit on Fifth Avenue, at the flagship store, everything in the store was 10 to 20 percent off of the lowest price. Trying to liquidate. And here is the cover story of today's "New York Post." You can see the soldier there trying to keep a smile on his face.

Basically what the company is trying to do is sell its FAO Schwarz, as well as its Right Stuff line. They are trying to find a buyer by a December 15 deadline, liquidate Zainy Brainy. And now that there are some problems with the ownership rights, Carol, they may have a problem in doing that. So that is the latest on FAO.

Meanwhile, people probably running to that store, lining up now to try to get some lower priced goods.

COSTELLO: What's bad for them is good for consumers.

Carrie Lee live from the Nasdaq market site.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com