NEW YORK: FAO, Inc., the parent company of high-end toy retailer FAO Schwarz, has tapped financial and crisis communications firm Sitrick & Company to assist with the communications surrounding the company's Chapter 11 bankruptcy protection filing. The company has also continued to work with Westport, CT-based Integrated Corporate Relations, its investor relations firm.
Sitrick has helped FAO develop a plan for communicating with the various parties affected by the filing, including FAO's landlords, toy suppliers, vendors, employees, management, store associates, and the media.
FAO is just the latest in a string of high-profile bankruptcies to hit the business pages in recent months. The parent company was formed only a year ago when the management of Right Start, which owns a chain of baby stores, purchased educational toy retailer Zany Brainy and the venerable chain FAO Schwarz. Each of the three chains had been struggling individually, and putting the three together and streamlining their operations didn't prove to be a much more advantageous structure. A difficult holiday season for the retail sector capped off a disappointing year for FAO and forced it to file for a Chapter 11 restructuring last week.
In the release declaring its plan to file for bankruptcy protection, the company stressed that it had been in contact with its various stakeholders and intended to quickly emerge from Chapter 11.
"The company has been in contact with many of its suppliers, and they have indicated that they will continue to support FAO, Inc. during the reorganization period," reads the statement from CEO Jerry Welch. "We are encouraged by the support demonstrated by our various creditor constituencies going into this process. We expect to emerge a stronger, well-capitalized company by the second quarter of this year."
The communications surrounding a Chapter 11 restructuring are somewhat circumscribed, prompting many high-profile companies to seek out agencies that are experienced in bankruptcy communications.
The sluggish economy has in fact proven to be a boon for Sitrick along with the handful of other agencies that together dominate the bankruptcy communications space.