Toys R Us acquires high-end retailer FAO Schwarz

Updated: Thu 1:26 AM, May 28, 2009

WAYNE, N.J. (AP) - Toys R Us Inc. says it has purchased FAO Schwarz, one of the nation's oldest toy retailers.

CEO and chairman Jerry Storch announced the acquisition of the iconic high-end store in a news release early Thursday.

Toys R Us will operate FAO Schwarz's flagship store in New York City and a second store at Caesars Palace in Las Vegas. FAO Schwarz's Web site and catalog will continue to use the company's name.

Storch declined to release financial details of the agreement.

FAO Schwarz was established in 1862 and was immortalized in the 1988 Tom Hanks movie "Big.”

The toy retailer filed for bankruptcy protection twice in 2003 amid tough competition from discounters such as Wal-Mart Stores Inc. and Target Corp. It was purchased by D.E. Shaw group in 2004.

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