Royal Vendex KBB N.V. has completed the sale of its American affiliated company FAO Schwarz. The sale contracts were signed on Monday in New York, thereby implementing the transfer of FAO Schwarz to The Right Start, Inc. A sale agreement in principle had already been concluded on November 19, 2001. Vendex KBB has sold the (loss-making) company because of its incompatibility with the groupÂ's Europe-oriented strategy.
The Right Start exploits under its own name a chain of seventy stores which sell educational toys and care products for children in early infancy. Since September of last year the company has also been the owner of the toy format Zany Brainy, which targets children in the ages from four to twelve and has 187 outlets. The takeover of 25 stores of FAO Schwarz means that The Right Start now reaches all juvenile age groups.
As a result of the sale Vendex KBB acquires a receivable from The Right Start in the form of a four-year subordinated loan of 18 million dollars. In addition Vendex KBB obtains 5 million shares of The Right Start, which corresponds to an interest of approx. 15% in the share capital of the company.
As earlier announced, the transaction will have, as of the following fiscal year (2002/03) a positive effect on the operating income of Vendex KBB (excluding income from real estate) and also on earnings per share.
(source: Vendex KBB)