FAO Schwarz Inc. (New York) has indicated that its large Chicago store will be open for Christmas.
A senior FAO executive, who requested anonymity, told Crain's Chicago Business that the 30,000-square-foot location — a hot potato ever since Right Start Inc. (King of Prussia, Pa.) bought the 40-unit FAO Schwarz chain in January — will remain open at least through the end of the year.
Right Start chose not to purchase the store on Michigan Avenue because the rent was too high. (Right Start bought only 23 of the 40 FAO Schwarz stores.) FAO's former owner, Royal Vendex KBB N.V. (Amsterdam) guaranteed the lease and has been paying the new owner under a three-year agreement to keep the Magnificent Mile store open. Payments totaled $1.2 million for the 26 weeks through Aug. 3, 2002, according to documents filed last month with the Securities and Exchange Commission.
The building's landlord sued Royal Vendex in February for the more than $40 million remaining on the 20-year lease signed in 1993. The lawsuit has yet to be resolved.