Children’s Retailer Will Try for Fresh Start on East Coast

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Children’s Retailer Will Try for Fresh Start on East Coast

Retail

by Deborah Belgum

After gobbling up two other toy retailers within the last year, Right Start Inc. is moving its headquarters from Calabasas to Philadelphia.

The transition has been ongoing for the last few months as executives have traveled consistently to the East Coast headquarters of FAO Schwarz and Zany Brainy, the two companies recently acquired.

Right Start President and Chief Executive Jerry Welch confirmed he would be moving soon to Philadelphia.

Accounting, human resources and back office operations will remain in Calabasas, said company spokeswoman Renee Hollinger. But many of the executive offices will relocate back east.

“A majority of our operations and stores are east of the Mississippi,” Hollinger said.

Right Start, founded in 1985 as a catalog seller of high-end infant and toddler development toys, began its buying spree last August when it acquired the 187-store Zany Brainy chain for $100 million in cash and stock following Zany’s Chapter 11 bankruptcy filing.

In January, Right Start completed its acquisition of 23 FAO Schwarz stores, including the flagship on Fifth Avenue in New York. The educational toy retailer paid FAO parent Royal Vendex $50 million to $60 million.

Taking Off the Wraps

Frederick’s of Hollywood, which has been in Chapter 11 bankruptcy protection since July 2000, is revamping its image from tawdry to tantalizing to capture a bigger market share.

This week the $150-million company unveils its new store design and concept at the Glendale Galleria.

The store is a compact 1,000 square feet and has a boutique feel. Accents are in mahogany, the curtains are deep red, and the carpet is a leopard print design. The lingerie retailer will also offer more toned down items for purchase than it has in the past.

“It’s something you wouldn’t feel ashamed to walk into,” said Linda LoRe, president and chief executive.

The decades-old lingerie company headquartered on Hollywood Boulevard is targeting the 18 to 34-year-old woman who has been shopping at competitors such as Victoria’s Secret.

Frederick’s will roll out its new design in 15 existing stores this year as well as five new stores. Next year the company will remodel 22 stores including its headquarters store and open 10 new stores.

When the company filed for bankruptcy, it had 200 stores. By year end it will have 175.

Tough Year

Losses grew last year for Los Angeles-based Tarrant Apparel Group, which makes blue jeans and other casual apparel for such stores as J.C. Penney, The Limited and Target. The company reported a net loss of $2.9 million for 2001 compared with a net loss of $2.5 million in 2000.

“Clearly 2001 was a difficult year for our industry as a whole, reflecting a very challenging environment which was further exacerbated by the events of Sept. 11,” Chairman Gerard Guez said in a conference call last week.

Staff reporter Deborah Belgum can be reached at (323) 549-5225 ext. 228 or at

[email protected].

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