Toys ‘R’ Us acquires FAO Schwarz

Wayne, N.J. Toys “R” Us Thursday announced it has acquired FAO Schwarz, one of the nation’s oldest toy retailers. Financial terms of the transaction were not released.

“We have enormous respect for the FAO Schwarz brand and for the special place it holds in the hearts of children everywhere,” said Jerry Storch, chairman and CEO, Toys “R” Us. “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.”

Following the acquisition, Toys “R” Us will continue to operate FAO Schwarz’s two existing stores: the flagship location in New York City, and a store at the Forum Shops at Caesars Palace in Las Vegas.

In addition, the company will operate the FAO Schwarz e-commerce and catalog operations. Each of these businesses will continue to operate under the FAO Schwarz name. All merchandising, management, distribution and marketing operations will immediately begin to transition to Toys “R” Us. Other terms of the transaction were not disclosed.

“This acquisition allows us to grow our toy specialist market share and draw upon the unique strengths of both brands in developing quality products that differentiate us from our mass market competitors,” continued Storch. “We are committed to providing the loyal clientele of FAO Schwarz with the unique shopping experience they have come to expect.”

FAO Schwarz, which has been in operation since 1862, filed for bankruptcy protection twice in 2003 amid tough competition from discounters such as Wal-Mart Stores. It was purchased by D.E. Shaw group in 2004.