FAO Schwarz in store for Chicago’s Macy’s

Upscale toy merchant FAO Schwarz is easing into retail expansion this month by opening a store-within-a-store in Macys’ downtown Chicago location.

FAO’s 5,200-sq.-ft shop, scheduled to open Nov. 1, will be located in the children’s department; Macy’s is also giving FAO Schwarz two windows on the main floor. The Macy’s location will give shoppers “a taste of FAO,” says the toy merchant’s CEO Ed Schmults.

FAO currently operates two stores its flagship New York store, which is 60,000 sq.-ft., and a Las Vegas location that measures 50,000 sq.-ft. After the holiday season, FAO’s store within the Chicago Macy’s will shrink to 3,500 sq. ft. from January through October.

To generate traffic to the store, the two retailers are mailing postcards to the Macy’s and FAO customer files. FAO also plans to trumpet its arrival jointly with Macy’s by covering Chicago buses, kiosks and billboards with ads launching Nov. 1.

The deal is a win-win, Schmults says, as FAO Schwarz needed to expand without taking on hefty real estate costs, and Macy’s needed to attract shoppers into the State Street store.

There is an opportunity roll the concept to other Macy’s stores, according to Schmults, who did not rule out Macy’s flagship Herald Square location. “If they came to me and wanted me to run their toy department, they’d have my attention,” he notes.