Bellevue mall sues ailing toy retailer FAO Schwarz
Maybe.
FAO, the parent of FAO Schwarz, The Right Start and Zany Brainy toy stores, filed for Chapter 11 bankruptcy protection Monday, causing a ripple effect locally among property holders that lease space to the high-end toy retailer.
That included Bellevue Square, which tried to evict the toy store last week. On Monday, it sued the retailer, attempting to take its merchandise as collateral for not paying January's rent and other charges totaling nearly $65,000.
On Monday, Bellevue Square filed two documents in King County Superior Court detailing the dispute. FAO, based in King of Prussia, Penn., could not be reached for comment yesterday afternoon. Mall officials declined comment, saying they could not talk for legal reasons.
Last month, FAO said it would close 70 stores nationwide, including 55 Zany Brainy outlets. The company's subsequent bankruptcy filing had been expected, largely a result of the strong pressure applied on specialty toy retailers by Wal-Mart, Toys R Us and other discounters.
In the case of the Bellevue Square location, the bankruptcy filing has stalled the lawsuit. FAO has 60 days to resume or reject the lease. If it resumes the lease, it would have to make all of its back payments. Either way, the 10-year lease for the 11,000-square-foot space expires at the end of June.
The FAO Schwarz in downtown Seattle apparently didn't make January's rent as well. But Betsy Sutherland, vice president and regional manager at Bentall, which owns the property, said there was no eviction attempt.
"I've dealt with bankruptcy before," she said. "If you file a default, it gets dismissed. We could have put them in default on the second day of the month, but it would have been null and void after they filed bankruptcy on Monday."
Sutherland said she thought the 15,280-square-foot location, which opened in 1995, had been doing well and, based on what she heard, thought it would remain open. Yesterday, FAO Schwarz ran ads for only the Bellevue Square location.
Besides the Bellevue and Seattle locations, FAO has Right Starts at Bellevue Square and Seattle's Union Bay Plaza, near University Village. Redmond Town Center has a Zany Brainy.
A spokeswoman at Redmond Town Center wouldn't say whether FAO had paid its bills, but did say the Zany Brainy had performed well in 2002. It wasn't having "the same issues as Bellevue Square," she said.
Parents at the Bellevue store yesterday said the discounts made the toys a little more affordable than those at the discounters. "I think I'll come back on Saturday with my other son," said Patsy Rogerson, who was with her 4-year-old, Trevor.
Tricia Duryee: 206-464-3283 or tduryee@seattletimes.com.