Toy store deal approved

Tuesday, Jan. 27, 2004 | 9:18 a.m.

PHILADELPHIA -- The flagship FAO Schwarz toy store on New York's Fifth Avenue will be preserved as a "cultural treasure," an investment firm acquiring parts of bankrupt FAO Inc. for $41 million said Monday.

"FAO Schwarz is more than just a toy store," said David E. Shaw, chairman of the New York investment firm D.E. Shaw & Co. Inc., adding that the Manhattan landmark carried "a great deal of meaning to millions of children and former children."

The purchase of FAO Schwarz stores in New York and Las Vegas and the company's Internet and catalog businesses from King of Prussia-based FAO Inc. was approved Monday by Judge Joel B. Rosenthal in U.S. Bankruptcy court in Wilmington, Del.

The New York and Las Vegas stores will close and then reopen after four to six months of renovation, said Jerry R. Welch, president of FAO Inc.

The stores will focus on distinctive, high-end specialty toys, said Max Holmes, a D.E. Shaw managing director and head of the company's distressed securities group.