FAO Schwarz to open its largest flagship toy store in Beijing to introduce Chinese consumers to ‘experiential’ shopping

FAO Schwarz will open a 2,600 square meter (28,000 square feet) flagship at the China World Trade Center mall in Beijing

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Customers experiencing the dance-on floor piano at the New York outlet of FAO Schwarz on its last day of operation on July 15, 2015. Former owner Toys’R’Us decided to close the Fifth Avenue store two months earlier, citing high and rising costs of running the 45,000-square-foot retail space. Photo: AFP

Published: 11:46am, 5 Mar 2019Updated: 8:44pm, 5 Mar 2019

FAO Schwarz, the oldest American toy store, is poised to open its largest worldwide flagship in the Chinese capital this year, taking its iconic brand and interactive experience to a market where spending is expected to outpace the rest of the world.

The store at the China World Center mall in Beijing’s central business district will offer 2,600 square metres (28,000 square feet) of retail space, 40 per cent larger than its existing flagship outlet at the Rockefeller Center in New York city. A second store in Shanghai is on the drawing board, while 30 smaller speciality shops are also being planned for China in the next five years.

“FAO Schwarz is focused on creating a theatrical experience, where there will be many demonstrators to interact with children and parents” in store, said Sherman Hung, chief financial officer of The Kidsland Group, China’s largest toy retailer and the Chinese partner to FAO Schwarz. “This is part of our exploration into providing new experiences for customers.”

China, which already designs, assembles and produces toys for the world – including such customers as Mattel, Hasbro and FAO Schwarz – is also the largest global market for recreational and education products, where toy sales may reach 92.45 billion yuan (US$US$13.8 billion) by 2022.

A seismic shift is taking place in the country’s retail industry, where the popularity and convenience of online shopping have reduced foot traffic in bricks-and-mortar stores, slashing sales growth to an estimated 4.3 per cent between 2018 and 2022, from 8.2 per cent between 2012 and 2017, according to Euromonitor.

“Traditional retail has suffered. Big retailers are starting to use the physical shop on high streets and in shopping centres to showcase their products … more of a showroom rather than an actual point of sale,” said David Faulkner, the managing director of valuation and advisory services at Colliers Asia.