F.A.O. Schwarz to close Fifth Avenue store amid rising rents

New York -- Surging rents in Manhattan have claimed another victim, and this time it's one of the city's most iconic retail establishments. F.A.O. Schwarz will close its legendary toy store on Fifth Avenue this summer, citing the high and rising costs of operating a store on one of the city's most pricey blocks of real estate. Toys "R" Us, which acquired F.A.O. Schwarz in 2009, said it will close the 45,000-sq.-ft. store on July 15, and that it is on the hunt for another location in Manhattan.



"The company is committed to the F.A.O. Schwarz brand and growing its legacy," Toys "R" Us said in a statement. "In fact, it is actively searching for another location in midtown Manhattan where FAO Schwarz can welcome shoppers from around the world." (Toys "R" Us is also on track to shutter another of the city's signature stores, the Toys "R" Us in Times Square, when the lease expires in January.)



F.A.O. Schwarz has had a store in New York City since 1870. It moved to its current Fifth Avenue location, the General Motors building between 58th and 59th Streets on Fifth Avenue, in 1986 (the building is also home to an Apple store). The toy emporium has been featured in several movies, most notably "Big" with Tom Hanks.



F.A.O. Schwarz once operated some 40 stores around the country, including a flagship location in Las Vegas. But those stores were closed over the years, leaving it with only the Fifth Avenue outlet and in-store shops at Toys "R" Us locations (and an online shopping site).



Retail rents along Fifth Avenue from 49th to 60th Streets now rank among the highest in the world, averaging $3,500 per square foot for ground-floor space, according to Bloomberg, which cited a November report by Cushman & Wakefield.