Toys “R” Us Buys FAO Schwarz

Toys “R” Us Inc. (Wayne, N.J.), one of the largest dedicated toy and baby products retailers, has acquired FAO Schwarz, the world’s oldest toy retailer. Toys “R” Us will continue to operate the two FAO Schwarz stores, including the New York flagship and a store at the Forum Shops at Caesars Palace in Las Vegas, as well as its e-commerce and catalog operations. All will maintain the FAO nameplate, while the toy retailer’s branded stores inside Macy’s will be phased out by November.

“We have enormous respect for the FAO Schwarz brand and for the special place it holds in the hearts of children everywhere,” Jerry Storch, Toys “R” Us chairman and ceo, said in a statement. “Building upon this storied tradition is a responsibility we take very seriously. 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.”

The company sees the acquisition as an opportunity to grow its market share and draw upon the strengths of both brands in developing products that differentiate it from mass market competitors, including Target and Walmart.

Toys “R” Us says it will offer employment opportunities to FAO Schwarz associates in the New York and Las Vegas stores; however, FAO chief executive Barry Erdos, who was hired in April, will not remain with the company. Toys “R” Us operates 1500 stores in 33 countries worldwide. Earlier this year, the company expanded its offerings by purchasing eToys.com, babyuniverse.com, Toys.com and parenting resource site, ePregnancy.com.