FAO Schwarz coming to three metro Macy’s

FAO Schwarz coming to three metro Macy’s

By JACKIE CROSBY, Star Tribune
May 16, 2008

Just in time for the holidays, FAO Schwarz will open toy stores in three Twin Cities Macy’s as part of a deal that will expand to 685 locations in the next two years.

Downtown Minneapolis, Southdale Center in Edina and Burnsville Center will be among the first wave of 275 stores that will open this year, Macy’s spokesman Jim Sluzewski said. Other Minnesota stores might open in the future, but no firm plans had been hammered out, he said.

Under the deal announced Friday, FAO Schwarz will own and operate the stores, which will carry an exclusive private label plus the popular FAO brands of books, music, stuffed animals, wooden toys and other collectibles.

Minnesota’s three stores will be among 75 locations that will host full-size FAO shops of 1,000 to 3,500 square feet in the Macy’s stores’ existing toy departments.

The toy market took a hit during the last holiday season, after millions of Chinese-made toys were recalled because of lead paint and other hazards. Specialty toy retailers fared better in toy sales than mass retailers, such as Wal-Mart Stores Inc. and Target Corp.

Terry Lundgren, Macy’s chief executive, said in a prepared statement that the FAO Schwarz distinctive products would “drive store traffic, particularly to our children’s departments.”

The concept has precedent. Marshall Field’s, which Macy’s purchased in 2005, had a similar deal with local chain Creative Kidstuff. The boutiques within the department stores expanded to more than a third of the chain’s 60-plus stores. Macy’s and the toy chain mutually agreed to part ways soon after Macy’s acquisition.