As reported by multiple news outlets to include the New York Times, the iconic Toys “R” Us FAO Schwarz store in New York City has reported that the store will close effective July. The company cites increasing rents as the reason for leaving the midtown Manhattan location. Once the doors shut, the 153-year-old brand will no longer have a retail outlet.
However, someone from the inside stated that another location for the retail stop is being scouted, also in Manhattan. If that information is true, a new outlet could open sometime late next year.
According to reports, FAO Schwarz brand toys will continue to be sold in other Toys “R” Us stores, as well as through the company’s website. In addition, once the New York City store closes, the company is working to place roughly 200 employees in other locations within the region.
From an emailed statement from Toys “R” Us, the company remains fully committed to the FAO Schwarz brand and will continue to work hard in growing the organization’s legacy. Obviously, it is sad to leave the Manhattan location but there is new opportunity in creating a new flagship location also in New York City.
Almost 30 years ago, the General Motors Building became home to the FAO Schwarz store and although it has always done well, it was after being featured in the mega hit movie, Big starring Tom Hanks that its popularity skyrocketed. During one scene in the film, Hanks along with his costar, Robert Loggia, danced on a huge piano on the floor. Over time, that piano became a star attraction with children visiting the store being invited to play on it.
Originally, FAO Schwarz opened in 1862 and over the course of time moved to a number of locations. At one point, the store set up shop in Union Square. Then in 2009, FAO Schwarz was purchased by Toys “R” Us.
As stated by Faith Hope Consolo, chairman of retail brokerage at Douglas Elliman Real Estate, family stores deemed as being entertainment oriented have been moving toward Times Square for some time. The fact that Toys “R” Us is leaving comes as no big surprise since this is something the company has been considering for about 18 months.
Even back in 2008, the current location of the FAO Schwarz Toys “R” Us store was deemed to be “uneconomically viable”. By working with the owner of the property, it was agreed the toy store would leave ahead of its 2017 lease expiration, which equals huge savings in rent.
According to Cushman & Wakefield, retail rent on Fifth Avenue between 49th and 60th streets averages $3,500 per square foot for ground floor space, the highest in the entire world. With that, it is understandable why Toys “R” Us would exit its iconic location.
Times Square Bound
Although nothing has been confirmed, there have been rumors that the FAO Schwarz store will occupy space under ground at 1633 Broadway located just to the north of Times Square. However, when asked for confirmation from Peter Brindley, senior vice president of leasing at Paramount Group, Inc. who owns the building, he declined to comment.
If those rumors are true, this would be great news for FAO Schwarz since the location is virtually a mirror image to the current General Motors Building. The new location, just like the current one, has a huge front plaza that customers are already familiar with. When questioned if the Toys “R” Us brand will be negatively impacted by not having a physical shop for a year, Consolo firmly believes it will not.