685 Macy's-FAO Schwartz Toy Stores Planned

New York, NY (AHN) - Department store giant Macy's, Inc. and toy store pioneer FAO Schwartz have signed an exclusive store-within-a-store" agreement where FAO Schwartz will set up toy stores in 685 Macy's department stores by 2010.

In a joint statement, the companies said they aim to have toy stores in up to 275 Macy's stores by fall this year.About 75 full-sized while 200 others will be smaller shops no bigger than 300 feet. Under the agreement, FAO Schwartz will showcase its collections at Macy's stores while independently owning and operating its own chain of stores.

FAO Schwartz, running on its 146th year in business still keeps its flagship store on New York's Fifth Avenue. CEO Edward Schmults reportedly said that the two brands have a combined history of 296 years of bringing "joy and retail magic to consumers."

150-year-old Macy's, on the other hand, operates more than 850 department stores in 45 states, the District of Columbia, Guam and Puerto Rico under the brands Macy's and Bloomingdale's.

"This is an outstanding partnership that will bring toys back to Macy's in an exciting and unique way," said Macy's top executive Terry J. Lundgren in the statement, adding, "FAO Schwartz 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."