On a mission to evolve beyond its toy roots and cement its new positioning as an all-encompassing kids lifestyle retailer, FAO Schwarz has acquired high-end children’s apparel chain Best & Co. The plan is to operate the two chains, both of which have been in business for more than 100 years, separately.
FAO CEO Ed Schmults envisions the two brands co-existing in a tiered system much like the one Ralph Lauren has set up. The designer’s Chaps label is featured exclusively at Kohl’s, while a distinctly separate Purple Label sells through more high-end stores like Bergdorf Goodman – and never the two shall meet.
But there’s still plenty of room to grow the two brands by swapping best business practices. Best & Co. has strong locations in Greenwich, Connecticut and a boutique inside New York’s Bergdorf Goodman that hits the exact combo of classic product with a modern twist that FAO is aiming to bring to its toy operations. Its catalogue and internet businesses, however, are comparatively weak. The apparel chain’s spring and fall catalogue mail-outs generally involve just 30,000 copies, whereas FAO deals in seven million copies each year. So there are some obvious benefits to be gleaned from co-mailing activities.
FAO doesn’t currently have plans to open more than its two existing Best & Co. outlets, but a new 5,200-square-foot FAO shop opened up inside Macy’s State Street store in Chicago this past November. The boutique is the first new FAO location to launch since the chain’s nationwide bankruptcy-induced closure in 2003.
Schmults says traffic in FAO’s New York flagship store has increased by 65% this year, and he is in discussions with Macy’s about opening up additional shop-in-shops to cater to families with high household incomes and college educations.