The FAO Schwarz toy store on Fifth Avenue in New York City, May 28, 2009.MIKE SEGAR/Reuters
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 Inc., 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. The company also is trying to find jobs for the store's 200 employees at its other shops in the region.
"The company is committed to the FAO Schwarz brand and growing its legacy," Toys "R" Us said in an e-mailed statement. "While we are sad to say goodbye to our current location, we are excited about the opportunity to create a new flagship location in New York City that will no doubt delight generations of children to come."
The Fifth Avenue store, which opened almost three decades ago, became famous 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.
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.
Early Exit
Toys "R" Us has been considering leaving the building, which is operated and majority owned by Boston Properties Inc., for more than a year and a half. The retailer hired brokers at CBRE Group Inc. to explore subleasing the space before the rental agreement expires in early 2017.
"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.
The company is considering moving FAO Schwarz into the below-ground space at 1633 Broadway, a 48-story skyscraper at Broadway and West 50th Street, just north of Times Square, Crain's New York Business reported last week. A Toys "R" Us spokeswoman declined to comment. Peter Brindley, senior vice-president of leasing Paramount Group, which owns the tower, didn't immediately return a phone call.
Calls to John Powers, regional manager for Boston Properties' New York operations, weren't immediately returned.
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.