This morning, Toys R Us Inc. announced that it purchased high-end toy retailer FAO Schwarz. FAO has struggled mightily for years, thanks to harsh competition from discount toy stores.
Toys R Us CEO Jerry Storch stated, "We will work tirelessly to preserve the distinctiveness and integrity of the FAO Schwarz stores and brand as we grow the business and, indeed, take the brand to even greater heights."
Toys R Us will operate FAO Schwarz's New York City store and a second store at Caesars Palace in Las Vegas under the FAO Schwarz name. FAO's Web site and catalog will continue to use the company's iconic name.
FAO was established in 1862 and is known for its upscale selection of toys. Recently, the struggling store started to offer its own brand of toys priced under $20. The New York toymaker has fought bankruptcy for years, filing twice for protection in 2003. D.E. Shaw group purchased FAO Schwarz in 2004.
I can see it now, with FAO joining the more than 1,500 Toys R Us stores worldwide; is a commercial with Geoffrey the Giraffe and Tom Hanks in the piano scene from Big too far off? It would make me laugh. That said, this is a sign of the times, as the specialty retailer is giving way to the competition. FAO was able to hold off for only so long before it finally had to give in and sell off. Ultimately this will be better for FAO, but it is sad to see a specialty company give in to the bigger competitors.
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Reader Comments (Page 1 of 1)
5-28-2009 @ 12:49PM
Kevin D said...
I hope FAO doesn't become like it's now parent Toys R Us - just in my experience customer service and the care Toys R Us takes of it's own facilities is akin to a rundown warehouse.
Some of the polish of the FAO brand may fade; let's hope not.