FAO Schwarz salutes its new owners Toys R' Us. Toys 'R' Us has acquired its rival toy retailer. Terms of the deal were not disclosed. Bloomberg reports that Toys R' Us plans to continue operating FAO Schwarz's two big retail stores in New York and Las Vegas under the same name. The FAO Schwarz website and catalog businesses will also retail the same name.
Chris Byrne, a toy analyst at TimetoPlayMag.com, told Bloomberg that financially it's a brillaint move to combine the two toy companies.
The deal combines two closely held retailers that have faced increased competition from the Internet and discount chains during the recession. U.S. retail sales of toys generated $21.6 billion in 2008, a 3 percent drop from 2007, according to researcher NPD Group Inc. Mass merchant, discount and online retailers saw the most modest declines, NPD said, as consumers looked for ways to buy non-necessities at the lowest cost.
"Financially, I think it's brilliant," Chris Byrne, a New York-based toy-industry analyst and director of content at TimetoPlayMag.com, said today in a telephone interview. "You get all of the cachet and the look of a specialty store and a destination with the operational efficiencies of a giant like Toys "R" Us."
At Wal-Mart Stores Inc., the world's largest retailer, entertainment, electronics and toys accounted for 14 percent of sales in the year that ended Jan. 31.
A Bizjournals.com article says the deal means there will be no more FAO Schwarz stores inside Macy's locations.
