FAO Schwarz
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| Type | Subsidiary |
|---|---|
| Founded | 1862 |
| Headquarters | New York, New York |
| Industry | Retail |
| Products | Toys,Clothing |
| Parent | Toys "R" Us |
| Website | F.A.O Schwarz.com |
FAO Schwarz is the name of an upscale specialty toy retailer headquartered in New York City. The flagship store is located on 5th Avenue in New York City.
FAO Schwarz was founded in 1862 under the name Toy Bazaar by German immigrant Frederick August Otto Schwarz, in Baltimore, where he and his brothers retailed toys from a fancy-goods store. Additional locations of Toy Bazaar followed in Philadelphia and Boston. However, it was the New York City location, where, after, the name was changed to FAO Schwarz, that dominated the others in the family business after it was opened in 1870. The toy store became well-known for its unique plush toys and memorable environment that pioneered "entertainment retail," the philosophy that a store should be an experience for its attendees. In 1931 the New York location was moved to the southeast corner of 58th Street and Fifth Avenue (the site currently occupied by the Bergdorf Goodman Men's store).
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[edit] Expansion and retreat
In 1963 the Schwarz family sold the business to Parent's Magazine. The business was subsequently sold to W.R. Grace in 1970, and to toy retailer Franz Carl Weber International of Zurich, Switzerland in 1974. As an absentee owner, Weber sought strategic alternatives in order to boost business. He approached venture capitalist Alan Patricof for a $1 million investment. Patricof concluded that the favorable long-term lease that Weber had on the famed Fifth Avenue retail store was significantly below market; however, there was no right to sublet or otherwise capture the value in the lease itself which far exceeded the value of the company as an operating company. Patricof referred Weber to his brother-in-law Craig Hatkoff, a real estate investment banker at Chemical Realty Corporation who concluded that Weber should try to sell the lease back to the landlord. At the meeting between Hatkoff and the building owner Christiana Companies, the landlord actually made an offer to buy the entire company for $4 million. FAO Schwarz was thus sold to the Christiana Companies in 1986, and the business was sold shortly afterward to Christiana Companies CEO Peter Harris and investor Peter C. Morse. In 1986 the New York Store was moved across 58th Street to its current location in the General Motors Building. FAO Schwarz was acquired by Dutch retail group NV Koninklijke Bijenkorf Beheer in 1990; Morse left the company, but Harris remained as CEO until 1992, when he was replaced by John Eyler. In 1998, KBB was acquired by Vendex NV, another Dutch retailer. Throughout the 1990s, FAO Schwarz opened new stores; the chain's peak occurred in 2000 when a total of 42 stores were located throughout the United States under KBB.
[edit] FAO Schweetz
In addition to FAO Schwarz toy stores, starting in 1996 standalone candy stores branded as "FAO Schweetz" were opened in Miami, at the Source Mall in Long Island, NY, at Old Orchard Shopping Center in Skokie, Illinois and at Water Tower Place in Chicago.
[edit] Bankruptcy
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However, shortly after its business peak in 2000, the company faced financial failure. Vendex put the 42-store chain up for sale. In 2001, The Right Start Company bought 23 of the 42 stores from Vendex. The other nineteen unsold stores were immediately closed. In January 2003, Right Start filed for bankruptcy, emerging from bankruptcy in April 2003. The company filed for bankruptcy a second time in December 2003.
[edit] D. E. Shaw & Co.
In February 2004, investment firm D. E. Shaw & Co., L.P., acquired the FAO Schwarz brand, the FAO Schwarz stores in New York and Las Vegas, and FAO Schwarz's catalog and internet business. The New York and Las Vegas stores were reopened on Thanksgiving day 2004.
[edit] Best & Co.
In November 2007, FAO Schwarz acquired premium children's clothing company Best & Co., which has plans to expand. [1]
[edit] Macy's
On September 27, 2008, an FAO Schwarz opened up at one of the Macy's Illinois State Street flagship store in Chicago. It is the first FAO Schwarz located inside a Macy's, and over 250 locations will follow in 2008 and 2009.[1] In 2008 FAO Schwarz contracted with Boston Interactive to create a new look for FAO's web site design to appeal to the new generation of online shoppers.
[edit] Toys "R" Us
In May 2009 Toys "R" Us, Inc., the largest toy chain in the United States, acquired FAO Schwarz for an undisclosed price. As a result of the acquisition, Macy's would close FAO Schwarz shops in its stores by November 2009. Toys "R" Us planned to continue operating FAO Schwarz's retail store in New York and another in Las Vegas under the same name, along with the company's Web site and catalog businesses.[2]
[edit] New York City location
The New York City store, located in the General Motors Building at Fifth Avenue and 58th Street in Manhattan, is the most popular FAO. Schwarz store, and a famous destination in the city.[citation needed] The store was redesigned by architect David Rockwell of The Rockwell Group in collaboration with Paul Gregory of Focus Lighting in 2004. The Fifth Avenue flagship store now features a large open front area and award-winning lighting[3] which includes almost 80,000 LED lights mounted on the ceiling above the main atrium space.
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The store contains many unique mini stores featuring create-your-own Barbie, Muppet Whatnot, and baby dolls.
[edit] The "Big" piano
The New York store was featured in the 1988 Tom Hanks film Big, in which Hanks and Robert Loggia danced "Heart & Soul" and "Chopsticks" on the store's large floor piano. It is said that Robert Loggia's character is based on then-CEO Peter Harris.[4][unreliable source?]
[edit] References
- ^ http://www.fao.com/custsvc/custsvc.jsp?sectionId=606
- ^ "Toys "R" Us Acquires FAO Schwarz, Fifth Avenue Store". Bloomberg. 2009-05-28. http://www.bloomberg.com/apps/news?pid=20601087&sid=aijAoDFBRLQE. Retrieved on 2009-05-28.
- ^ "Lumen Award Winners 2005". IESNY. http://www.iesny.org/LumenAwardWinners2005.aspx. Retrieved on 2007-06-02.
- ^ Big (1988) - Trivia
