The closure of the toy store in midtown Manhattan will leave the 153-year-old brand without a retail outlet.
The FAO Schwarz toy store in midtown Manhattan will close in July because of rising rents, leaving the 153-year-old brand without a retail outlet.
Toys “R” Us, which owns the store in the heart of Fifth Avenue across from the Plaza Hotel, said it’s looking for another Manhattan location for the shop. A new outlet could open in late 2016, a person familiar with the situation said.
While the company seeks another location, a line of toys bearing the FAO Schwarz name still will be sold in Toys “R” Us stores and online. Toys “R” Us also is trying to find jobs for the store’s 200 employees at its other shops in the region after the July 15 closing.
The store, which opened in the General Motors Building almost three decades ago, grew in popularity after being featured in the 1988 hit film “Big” when actors Tom Hanks and Robert Loggia danced on a giant toy piano spread across the floor. The store eventually turned that into an attraction, allowing kids to play on it.
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FAO Schwarz got its start in 1862 and has moved several times since then, including a stop in Manhattan’s Union Square. Toys “R” Us purchased FAO Schwarz in 2009. At the time, it had a store in Las Vegas that was in the process of closing when Toys “R” Us made the acquisition.
An FAO Schwarz store at Bellevue Square closed in 2003, and a downtown Seattle FAO Schwarz closed a year later.
Toys “R” Us has been considering leaving the Fifth Avenue building, which is operated and majority owned by Boston Properties, for more than a year and a half.
Boston Properties President Douglas Linde said at a real-estate conference in 2008, when the company bought the building, that the store was “probably not the most economically viable” tenant long-term for the space and probably would leave.
“In working with the property owner, the company was able to agree on an early exit in advance of the 2017 lease expiration, providing the opportunity to realize meaningful rent savings,” Toys “R” Us said.
Retail rents along Fifth Avenue from 49th to 60th streets are the highest in the world, averaging $3,500 per square foot for ground-floor space, according to a November report by brokerage Cushman & Wakefield.
Being without a physical store for more than a year won’t hurt the FAO Schwarz brand long-term, said Faith Hope Consolo, chairman of retail brokerage at Douglas Elliman Real Estate.
“They’re not going to die,” she said. “When they open up, everybody will come back.”
The move comes as Toys “R” Us continues cutting costs while also trying to revive sales growth at its stores. It was taken private by Bain Capital Partners, KKR & Co. and Vornado Realty Trust a decade ago.