FAO Schwarz Now Property of Toys-R-Us
May 28, 2009 by Mark Ellis
Filed under Business
High-end toy retailer FAO Schwarz was purchased Wednesday by toy giant Toys-R-Us in a move that marks the second time in the last six years that FAO Schwarz has changed hands. In 2003, firm D.E. Shaw paid more than $41 million to buy out the ailing toy company from bankruptcy. The details of the yesterday’s deal have not yet been released.
Image: Flickr
Toys-R-Us and FAO Schwarz are owned by three reputable private equity firms: Vornado Realty Trust, Bain Capital, and KKR. Vornado Realty Trust has owned a third of Toys-R-Us since 2005 and joined forces with the other two firms in a payment of $6.6 billion for the toy retailer.
The move to purchase FAO Schwarz means that the three firms have decisively jumped into the toy market, one that critics have argued is too heavily based on subjective qualities. The visual appeal of a toy’s packaging, for example, is often more important than the toy itself, which makes the market more difficult to control.
