Toys “R” Us sells FAO Schwarz to ThreeSixty Group

The 150-year-old FAO Schwarz brand, acquired by Toys "R" Us in 2009, has been bought by ThreeSixty Group, which distributes products to 70,000-plus US retailers.
October 4, 2016

After seven years under the Toys “R” Us umbrella, the iconic FAO Schwarz brand has been sold to California-based toy manufacturer and distributor ThreeSixty Group. Terms of the transaction were not disclosed.

ThreeSixty Group provides a range of consumer products to more than 70,000 US retailers. Its categories include toys and other children’s products, holiday gifts, home décor, games, radio-controlled vehicles and drones, and athletic accessories, all of which are marketed under a portfolio of owned and licensed brands including Blue Hat Toy Company, Sharper Image, Black Series, Discovery Kids, Smithsonian and Animal Planet.

ThreeSixty will develop FAO Schwarz-branded toys and retail experiences, drawing from the one-of-a-kind products and in-store experience at the FAO Schwarz flagship store in New York, which closed in 2015.

A new FAO Schwarz toy collection and in-store experience will be available at select retailers next fall. Until then, FAO Schwarz merchandise will be available online and at Toys “R” Us in the US.

The 150-year-old FAO Schwarz brand was acquired by Toys “R” Us in 2009, at which time then-CEO Gerald Storch favored the strategy of securing more exclusives and  integrating FAO Schwarz into regular TRU stores. This seemed to increase the retailer’s market share for a time, but after being hit with continuously slumping sales, it implemented an ongoing transformation strategy in 2014 that has reduced costs significantly and has helped the company realize US$248 million (or 76%) of its US$325 million target. TRU expects to achieve the balance by the end of fiscal 2016.

ThreeSixty was founded in 1999 as MerchSource, which in 2011 acquired its longtime sourcing partner, ThreeSixty Sourcing. Together, they began operating under parent company ThreeSixty Group. As a company with a diverse and wide-ranging customer base, it says the acquisition of FAO Schwarz marks the first of many expansion opportunities ahead.

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