FAO Schwarz details new expansion strategy

One of the nation’s most iconic retailers has its sights set on airports — and China.

FAO Schwarz has entered into an agreement with Hudson Group, one of the largest travel retailers in North America, to open a chain of FAO Schwarz- branded airport shops in the U.S. and Canada. The stores will feature signature FAO Schwarz branded toys and games and products from other leading brands. The first location, which will debut later this year, will include a stand-alone candy store under the FAO Schweetz brand.

The expansion into airport retail follows the company’s announcement last fall that it will open a 20,000-sq.-ft. flagship at Rockefeller Plaza in Manhattan in time for the holiday 2018 season.

"FAO Schwarz's products and experiential retail format lend themselves well to the travel retail experience, and we are thrilled to be partnering with Hudson Group, a leader in the space," said David Niggli, chief merchandising officer for FAO Schwarz, which is owned by ThreeSixty Group.

In addition, FAO Schwarz is going global. It will launch into the mainland China market in 2018 via a brand collaboration with China's largest toy distributor, Kidsland. The long-term, multi-channel partnership will see FAO Schwarz enter the market with flagships Beijing and Shanghai. Kidsland plans to open 30 smaller FAO Schwarz specialty stores and shop-in-shops in 200 department stores across the country over the next five years.

"As the leading toy retailer, Kidsland is a powerful partner to bring the FAO Schwarz brand to life in China," said Jan-Eric Kloth, COO at ThreeSixty Group, Ltd (Hong Kong). "With a strong vision and rollout strategy, the launch will be an impactful, important milestone for the brand's global expansion plans."

Founded in 1862, FAO Schwarz was the oldest toy store in the United States when its sole remaining store, a flagship on Manhattan’s Fifth Avenue, closed in 2015. The name, however, lived on, with FAO Schwarz-branded products available at Toys “R” Us, which purchased the brand in 2009. In October 2016, Toys “R” Us sold FAO Schwarz to ThreeSixty Group which designs, manufactures and distributes toys and other consumer products under a portfolio of owned and licensed brands.

Last fall, Bon-Ton Stores said it would open FAO Schwarz toy departments in 186 of its stores. It also opened a holiday pop-up in Manhattan, at Bergdorf Goodman.