Exclusive toy retailer F.A.O. Schwarz was known for over a century for its exclusive, high-end toys. Stuffed giraffes stood tall enough to graze the ceilings of affluent children’s bedrooms or, more recently, wealthy girls had play dates around their $25,000 Barbie foosball table. But big box retailer Toys ‘R’ Us brought F.A.O. to its knees. Now, as the victor of that competition struggles to hold on to market share in the face of competition from Target and Walmart, Toys ‘R’ Us has purchased the F.A.O. brand and is revamping the brand in attempt to bolster its own sales.

The brand refresh includes a new logo, price tags more in keeping with Toys ‘R’ Us shoppers, and hangtags detailing F.A.O.’s history. Toys ‘R’ Us will keep the flagship F.A.O. store in Manhattan open. In time for the holiday season, it will incorporate F.A.O. sections into all Toys ‘R’ Us outlets nationwide and open ten temporary holiday locations. In the midst of action figures, video games, and Hello Kitty cosmetic sets, teddy bears and jump ropes with wooden handles may seem quaint and nostalgic, but Toys ‘R’ Us executives are betting the new brand will bolster sales and help keep the F.A.O. brand alive. Beginning this November, F.A.O. branded baby products such as dishes, rattles, and bedding will be sold in Babies ‘R’ Us stores.

Predictions about the success of this venture are mixed. Updating and incorporation of a premium brand may increase holiday sales for Toys ‘R’ Us. But F.A.O. Schwarz has struggled for years under a variety of owners, the range of products may be too limited to save the F.A.O. brand, and differences between the two brands may be too significant to make for a successful union.

Discussion Questions:

1. What is Toys ‘R’ Us doing with the F.A.O. Schwarz brand?
2. Do you think this strategy will work? Why or why not?

Stephanie Clifford, Toys ‘R’ Us Overhauling F.A.O. Schwarz Brand, The New York Times, October 1, 2010.