Release Date: Saturday, May 17th 2008

Tribune-Review: FAO Schwarz to open Downtown, South Hills stores

The department store chain announced plans Friday to bring the iconic playthings brand to nearly 700 Macy''s nationwide over the next two years. About 75 full-size FAO Schwarz toy stores are to open starting in the fall, along with about 200 smaller shops that will be up to 300 square feet.

"Downtown and South Hills are likely to be high on the list," Macy''s spokesman Jim Sluzewski said yesterday. "Downtown is a huge store, and aside from that South Hills is the largest in the market. Those stores have more existing space, so there''s a shorter path to carving out room for a new department."

Sluzewski said the FAO Schwarz stores-in-stores or areas will appear next to children''s clothing departments, and the Downtown and South Hills areas likely will be "on the larger" side.

Pittsburgh Downtown Partnership CEO Michael Edwards said the attraction would be great for Downtown business. "FAO Schwarz is a name brand that can certainly get people in their cars to experience that, and all the great shopping Downtown," he said.

Macy''s shareholders learned of the venture at their annual meeting yesterday. CEO Terry Lundgren told them that the Cincinnati-based retailer''s financial performance hasn''t been what he would like, but that Macy''s has outperformed most of its large competitors in terms of same-store sales.

FAO Schwarz gave its first Macy''s store-within-a-store a trial run in Chicago late last year.

"This is an outstanding partnership that will bring toys back to Macy''s in an exciting and unique way," Lundgren said. "FAO Schwarz is the world''s most famous toy retailer with interesting and distinctive products that appeal to our customers and will drive store traffic, particularly to our children''s departments."

Toy sections disappeared at most traditional department stores 20 or more years ago. Reading-based Boscov''s, with four stores in the region, sells toys next to its children''s clothing departments.

While FAO Schwarz will sell its private label collection toys at Macy''s stores, the 146-year-old company continues to own and operate its own stores, including a flagship store on New York''s Fifth Avenue.

Macy''s, formerly known as Federated Department Stores, operates more than 850 department stores in 45 states, the District of Columbia, Guam and Puerto Rico under the Macy''s and Bloomingdale''s names.

Pittsburgh''s Downtown store, once the flagship Kaufmann''s department store, has 11 floors of retail space with the children''s department on the fifth floor. The South Hills store in Bethel Park has three floors.

"Our two brands have a combined history of 296 years of bringing joy and retail magic to consumers," said Edward Schmults, CEO of FAO Schwarz. "I am thrilled that, through Macy''s, we will be able to offer the FAO Schwarz products to every American family."

Edwards of the Downtown Partnership said FAO Schwarz at Macy''s should complement the toy store farther down Smithfield Street, S.W. Randall Toyes & Giftes.

Owner Jack Cohen doesn''t see the new competition hurting his business. FAO Schwarz likely will have higher prices, less service and much different merchandise, he said.

"We look for things nobody else has," he said.