Two New York retailing icons are hoping to make a hit this holiday in Chicago when FAO Schwarz opens a toy store-within-the-store at Macy's State Street location.
If successful, there is something in this deal for both retailers. Macy's, it has been well documented, has found it rough going in the Second City as many consumers have refused to shop in a store that took the place of Marshall Field's. The department store chain is hoping that some of the magic surrounding the FAO Schwarz name will entice more shoppers through its doors.
For its part, FAO Schwarz is hoping that a success on State Street will lead to the company opening up store-within-a-stores in Macy's locations around the country. The company is trying to recapture some of its past glory that was almost lost forever when it filed for bankruptcy protection in 2003.
Ed Schmults, FAO chief executive, said the store-within-a-store would be given 5,200-square-feet inside Macy's children's department for the holiday selling season. The space will shrink to 3,500-square-feet from January through October.
"If things go well, we would roll out to other Macy's, first in the northern territory and then maybe broader," Mr. Schmults told the Chicago Tribune.
The FAO Schwarz of today is different than the one of the past. Gone, according to the Trib report, are many of the more extravagant items such as a $20,000 indoor mountain. Instead, the company is focused on finding items that are "original" and "well-made," according to Mr. Schmults.
"We've had some very expensive items in the past. We've gotten away from that," he said. "We don't want families to think they can't afford to shop there."
The two companies are looking to make a big splash for the holidays.
The toy retailer plans to launch an ad campaign on buses, kiosks and billboards in Chicagoland beginning on November 1.
Macy's is giving FAO Schwarz two windows on its main floor to capture the eyes of shoppers. During the holiday season, the line to see Santa will wind through the toy store.
Discussion Question: What do you think of the Macy's and FAO Schwarz deal in Chicago? What will it mean for each retailer? Do you see other opportunities for pop-up stores-within-stores in the department store channel?