Right Start Inc. plans to buy some assets of FAO Schwarz, including its Internet and catalog operations, for $55 million.
The deal also includes FAO Schwarz flagship Fifth Avenue store in New York, 22 other U.S. stores and rights to the FAO Schwarz name.
The move is an effort to consolidate top-tier children’s brands, according to news reports.
FAO Schwarz’s owner, Dutch retailing giant Vendex International NV will become a major shareholder of Right Start. Right Start, an educational products retailer, agreed to issue preferred stock convertible into 5 million common shares, an $18 million four-year note and assume about $10 million in liabilities, according to the reports.
The deal, subject to regulatory approval, was scheduled to close in January.
In August, Right Start bought bankrupt toy and game retailer Zany Brainy Inc.
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