Toys Were Us: The Tragic End of F.A.O. Schwarz (2024)

Louis Auchincloss's story "The Landmarker" tells of an heiress who owns a beautiful old building in Manhattan and her dear friend, an architecture afi- cionado, who begs her to save it from being torn down. He is passionate and persuasive. She is recep- tive. The reader feels hopeful. But then hope runs into reality. At the end of the story, the old manturns a corner one day to find that his beloved building is no longer there. Like the demise of that building, the closing of F.A.O. Schwarz came as a shock even as it felt inevitable, the erasure of yet another orienting point on the map.

If you grow up in New York City, as I did, you become inured to the continuous erosion of the landscape of your childhood. Still, F.A.O. Schwarz was a special case, because its identity was so wrapped up in the feeling of specialness that emanated from the store and pollinated its surroundings—the feeling that New York was the place you went to get one-of-a-kind things, and also the feeling that New York City itself was a one-of-a-kind thing.

"I was devastated to hear that the flagship store closed, and relieved that my children were old enough not to care," a friend wrote me. "F.A.O. on Fifth was our Mecca. It was a temple not just to toys but to childhood itself."

Right from F.A.O. Schwarz's early years—it was founded in 1862, in Baltimore—there were other locations. But the locus ofits mystique was the flagship store in New York City. It opened on lower Broadway in 1870, moving to Union Square in 1880 and to 23rd Street in 1897. The intervals between those moves are mea- sured in decades, but compared with what came next they were mere pit stops. In 1931, F.A.O. Schwarz moved to 745 Fifth Avenue, at 58th Street, and in 1986 it crossed 58th Street and settled into the southwest corner of the General Motors Building.

F.A.O. Schwarz was a store, but it was also a place of magic and alchemy, in which mere cash could be parlayed into something that, during the holidays, is even more valuable: the happiness of a kid opening a present. It was as though Santa's workshop had a front parlor where you could look at the most finely crafted, wondrous, and deluxe of all the offerings made in the back.

The toys at F.A.O. Schwarz were always of the highest quality, which is another way of saying they were expensive. As often happens when money amasses in one place, it becomes both the central fact and beside the point, felt but not seen. I mean this literally; like a restaurant that distributes menus without prices, F.A.O. Schwarz tagged its products with a mysterious code called "Borgenicht"—a German word meaning "never borrow"—known only to the employees. A shopper, pointing to an object of desire, had no way of knowing its cost. To find out he had to ask a sales- person. And a salesperson was always at hand to escort the shop- per from one section to the next.

Frederick August Otto Schwarz, the store's founder, would seek out craftsmen in the small towns of Europe and use his buying power to get exclusives on the items he liked. "What can you do for me?" he would ask. By this he did not mean "How low can you go on price?" in the Walmart usage, but rather what modifications could be made, per his specifications, that would result in a better product, which usually meant a more expensive one.

Schwarz was an early practitioner of selling by mail order, and his bounteous catalogs echoed the effect of his crowded but metic- ulously organized store. He was also one of the first merchants to emphasize the window display in attracting customers. Saks can claim Andy Warhol as one of its window dressers. F.A.O. Schwarz can claim Maurice Sendak. (Also Robert Mapplethorpe, but let's not dwell on that outrageous juxtaposition.)

The most important and enduring of Schwarz's innovations, however, was Santa. Schwarz did not invent Santa Claus, but he was the first merchant, of toys or anything else, to put a live Santa in a store, in 1875—the first to associate the rosy-cheeked old man in a red suit not just with giving toys but with buying them. So you should thank him, or curse him, the next time you wander into a drug- store on some balmy November day and hear "Jingle Bells" on the PA.

For generations of Americans, F.A.O. Schwarz was embroidered into the array of images and emotions we associate with the holiday season, like a retail version of The Nutcracker. With his bushy beard and twinkling eyes, Schwarz was even said to resemble Santa himself.

WHO or what, killed F.A.O. Schwarz? You could declare the mystery solved simply by saying, "Manhattan Real Estate." Like "Forget it, Jake, it's Chinatown," the phrase has a spooky finality that cannot be contested. Nevertheless, one day in late summer I went to 58th and Fifth to see the crime scene for myself.

Within a block of what used to be F.A.O. Schwarz are a number of the world's most famous purveyors of unappeasable desire: Tiffany, Van Cleef & Arpels, Louis Vuitton, Bergdorf Goodman, Cartier—impressive neighbors for a store selling children's toys, however rarefied they may be. But for me the intersection's identity was informed primarily by the Pierre and Plaza hotels, and especially by a now extinct place called Rumplemeyer's, once located in the lobby of what used to be the St. Moritz hotel and is now the Ritz-Carlton, on Central Park South. Was Rumplemeyer's hot chocolate with whipped cream as extra-delicious as I recall? Or was the pleasure I associate with the place wrapped up in the ceremony: the fancy silverware, the starched linen, and the plethora of stuffed animals lined up above the counter, so different from the kind one sees at a carnival. A trip to that part of town in winter involved a certain formality that even as a kid I recognizedas being part of an old-fashioned grandeur—an aesthetic of plushness, of heavy fabrics and dark wooden furniture, all those bygone indicators of wealth and taste that have been eclipsed by glass and brushed steel. When F.A.O. Schwarz closed, it wasn't just a toy store that was being mourned—it was the larger sense of occasion that surrounded a visit to the neighborhood. And it is important to mention that visitors, back then, accommodated themselves to New York, whereas at some moment in the late 1990s New York began to accommodate itself to the visitor.

With all this in mind I came to the corner of 58th and Fifth and sighted the now vacant storefront where F.A.O. Schwarz had been through the prism of the Apple Store. If that metaphor weren't explicit enough, I later discovered that the Apple Store is mov- ing into the space previously occupied by F.A.O. Schwarz while its own space is being renovated. The General Motors Building, once a brut- ish, modern presence amid the rococo Plaza and Pierre, now seemed to recoil slightly from the glass monolith at its base and the crowds surging in and out.

That should have been the end of it. Case closed! The purveyor of the world's most high-priced and elegant wish-granting machine had conspired with Manhattan Real Estate to kill off its most high-priced and elegant toy store. But mysteries that solve themselves too quickly always make me suspicious; they leave me feeling that there is more to see.

I had read about Amazon's latest service, Amazon Prime Now, and decided to try it out. The idea of snapping (or tapping) your fingers and immediately getting what you want, as though a butler were on the other side of the door, with access to a limitless pantry, was exciting. But what was in the pantry? Perusing the top sellers I found cat food, paper towels, printer ink. The most desirable item was a Bose Bluetooth speaker. There was magic, but it was all in the method. It wasn't so much what you got but the manner in which you got it. Once the butler, or the drone, retreats, you are left with your printer ink, your cat food, your paper towels.

I took a stroll down Fifth Avenue, past the New York Public Library, past the Empire State Building, until I was gazing up at the sharp end of the Flatiron Building. To my left was Madison Square Park. To my right, a place once called the Toy Building. If you face the Toy Building from across Fifth Avenue you will see a curious feature: a skywalk over 24th Street. Once upon a time, not that long ago, that skywalk contained the Toy Industry Hall of Fame. A series of bronze plaques dedicated to the inventors of such perennials as the Slinky, the teddy bear, and the Etch A Sketch lined the walls. It had been the nerve center of the American toy industry as recently as 2007. Now it was covered in scaffolding. Manhattan Real Estate had done its work. The bronze plaques were packed away. The showrooms and businesses scattered. TheToy Building's ground floor is now occupied by Eataly, the giant food emporium.

Steve Pasierb, president of the U.S. Toy Industry Association, told me that now "buyers don't all come into the city. The city gets on a plane and goes to Minneapolis, to meet with Target, or they go to Arkansas and meet with Walmart. Lego has a showroom in Connecticut. Hasbro has one in Rhode Island. Mattel is in L.A."

The toy business is going strong, he said. Sales are up 6 percent this year, and the annual toy convention at the Javits Center sells out. The "classic toys"—the Lincoln Logs, the Legos, the Slinkys— are still selling, and there has been an explosion in new, high-tech toys: cars controlled by a smartphone, drones. Even Elmo has had a software upgrade. "It goes way beyond Tickle Me Elmo," Pasierb said. "It's now All Day Elmo. He says 150 different things, and he sings songs."

"What about Mr. Potato Head?" I asked.

"Mr. Potato Head still sells."

"But does he talk?"

"Not yet."

"ONE thing that happened during the week was that Schwarz's toy store moveduptown, from Thirty-first Street to Fifty-eighth Street," E.B. White wrote in an unsigned Talk of the Town item for theNew Yorkerin 1931. "It will be quite a change for the clerks," he added, "some of whom have been working for the firm since the Grover Cleveland administration."

White reported that Teddy Roosevelt used to bring his children in and let them each fill a wicker basket with toys, and that Washington Augustus Roebling, the man who helped build the Brooklyn Bridge, was "crazy about jigsaw puzzles." The child star Jackie Coogan, famous from Charlie Chaplin's The Kid and, later, Oliver Twist, came "escorted by his father and his mother and a detective. Then worth only 500,000 dollars, Jackie bought a dollar seventy five target game, stayed an hour and a half after closing, and finally fell asleep on a counter full of Jackie Coogan dolls."

This notion of F.A.O. Schwarz as a kind of toy VIP room per- sisted for decades. In 1986, New York magazine reported that Diana Ross was a regular. Michael Jackson would be whisked to a private room; so would Frank Perdue, the chicken magnate, though he had to request it.

A toy is a single, special thing. Yet we want toys in abundance. We want to be drowning in them, overwhelmed by their vari- ety and sheer numerousness. When Fortune ran a story on F.A.O. Schwarz in 1940, it staged a photograph of two small children standing in a room full of toys, their shoulders bunched slightly around their ears as though worried it all might fall on their heads, but also pointing upward, as if to exclaim, "I want that one!"

This sense of profusion is an aspect of toy display that F.A.O.Schwarz perfected. As the store prospered it got bigger, and the increasing scale became part of the attraction. But unlike at today's big box stores, at F.A.O. Schwarz the inventory was kept out of sight. Everything a customer saw on the sales floor was a sample, much of it kept under glass.

"You would show people things," said Caroline Schwarz- Schastny, the founding F.A.O.'s great-granddaughter, who functions as a kind of family historian. "There was much more interest in actually selling, in listening to what people wanted and making suggestions, more interest in what people wanted and needed."

According to Schwarz-Schastny the store's history is dotted with over-the-top shopping binges, including the time a Texas man came to buy life-size animals to populate his nativity sceneand had all of them shipped back to Texas, and the time a man arrived in a Ferrari with his son and purchased the toy version of the car for the boy.

"All the salespeople had to be present in the store the night before Christmas," she told me.

"Because of the last-minute shoppers?" I asked.

"Because after all the old men had their fill of whatever at the office Christmas party, they came in and would buy everything in the store."

Were they just being generous, their prudence overcome by liquor and the holiday spirit? Or were they trying to absolve themselves of some- thing that had happened at the office party? There was no way to know.

"Of recent years," White noted in 1931, "the grandson has carried on the business"—an offhand remark that glosses over considerable anguish in the Schwarz family. H.F. Schwarz, the founder's son, died of heart dis- ease in 1925, at the age of 59. His son, another F.A.O. who went by Fritz, had not intended to work in the family business. At the time of his father's death he had finished Harvard Law School and was about to start work as a clerk for Supreme Court Justice Oliver Wendell Holmes. But he abandoned the clerkship and moved to New York to mind the store, and his mother. Once both were in sufficient order, Fritz left to join a law firm and eventually became managing partner of Davis, Polk. (A Mr. Baettenhausen was put in charge of the store—a scandalous figure in the family lore who apparently had Gloria Swanson as a mistress.) As chairman Fritz decided to move F.A.O. Schwarz from 31st Street up to 745 Fifth Avenue in the depths of the Great Depression. The store's sales were flat for a couple of years. When the Depression lifted, business boomed to new heights.

One theme that emerged when I talked to members of the Schwarz family, from one generation to the next, is how the extravagance of owning the world's most famous toy store was never allowed to affect the younger generation's sense of entitlement, especially when it came to toys. One Christmas Eve youngH.F. Schwarz was caught eyeing the hobby horse he had been beg- ging for through a keyhole he had been warned away from. As punishment, there was no hobby horse on Christmas morning.

Fritz was to make another major move in 1963, following the death of his mother, when he decided to sell the business.

"He asked, 'Are any of my children going to run the store?' " his son F.A.O. Schwarz III, who goes by Fritz Jr., told me. "I, the oldest, was incompetent and didn't want to anyway. And my next brother, Marshall, who later became head of U.S. Trust, didn't want to either." Fritz Jr. later represented such corporate titans as IBM and Time Inc. as a partner at Cravath and is now mostly retired from practice. He has served as a special commissioner under New York City mayors from Koch to de Blasio and is now a chief counsel at NYU's Brennan Center for Justice. Fritz Jr. didn't go into the family business, but he said the family name has served him well anyway. "Judges would always smile when they saw it," he said. "It put them in a good mood."

"By that time you were in the fourth generation and facing the problems of dispersed ownership. Also, my father had the instinct that the luxury toy business was going to get tougher and tougher. He could see the trend of toys being used as a loss leader in department stores," meaning they would be sold below cost to get people into the store. "He was concerned about the future of a really high-end toy store and decided to sell."

Fritz Jr.'s own connection to the store didn't go beyond summer jobs as a teenager, both on the store's floor and in the warehouse, where the work was arduous. But at the end of the day he could slide from the fifth floor to the ground floor down a giant spiral slide meant for packages. I told him I had found a profile of his father that included a description of him as a 10-year-old going down that very slide.

In 1963, F.A.O. Schwarz was purchased by Parents magazine, whose founder and publisher, George Hecht, had an interest in toys and education. Parents bought the store, but not the name, for an undisclosed amount. According to the terms of the deal, it would license the name F.A.O. Schwarz for a maximum of five years, after which point the name would have to be dropped. In the meantime the new owners would pay the Schwarz family a royalty on sales. It was a very small percentage, but for the fam- ily even a very small percentage added up. After five years it was felt that the name was too important to drop, and the lease was renewed. The royalties continued. Eventually it was agreed that the name was never going to change, and it was sold outright, but part of the price was a permanent extension of the royalty agreement.

The family put the income into a family foundation whose purpose is to fund opportunities for young people to work in the nonprofit sector. The F.A.O. Schwarz Foundation is now run byFritz Jr.'s son, who worked for a while as a reporter, then founded Citizen Schools, an after-school program, and whose new project is the College for Social Innovation. His name is also F.A.O. Schwarz (the fourth), but he goes by Eric.

PARENTSmagazine sold F.A.O. Schwarz to W.R. Grace in 1970, and by the time Peter Harris, a hotshot retail executive, and his backers bought it, in the mid-'80s for $6.5 million, thestore was already several times removed from the Schwarz family's ownership. It was under Harris's management, in 1986, that F.A.O. Schwarz moved into the General Motors Building—an occa- sion for a conniption on the part of some of the store's longtime patrons. "When I heard they were leaving this building I almost had a heart attack," said a Mrs. Galen, in a 1986 article inNew York.

"To me, this is New York." Katharine Davis Fishman, the article's author, remarked that F.A.O. Schwarz is "one of the last stores to evoke the New York of F. Scott Fitzgerald, J.D. Salinger, and Auntie Mame."

The new store opened to much fanfare, and soon afterward Tom Hanks was dancing along the giant piano keys. But the underpinnings of the business were shifting. Barbie was introduced to America in 1959, G.I. Joe in 1964. The F.A.O. Schwarz mystique had been built around the exclusive: the exclusively good taste of the founder himself, touring the toymakers of Germany, France, and Switzerland; the exclusive item— a Steiff doll, for example, or a Lionel train set, or some other novelty toy that could be found only at F.A.O. It was also built around that warmer and more intangible feeling that a visit to the store was itself a unique experience. But the toy trade was rapidly becoming mass market, the territory of best-selling brands like Teenage Mutant Ninja Turtles andCabbage Patch Kids. Meanwhile, around the country similar pressures were transforming our most illustrious department stores and grandest hotels from family concerns into numbers on a conglomerate's balance sheet.

In 1990, Harris sold to a Dutch company, Vendex, which spent the next decade opening stores across the country and then sold the business to a toy retailer, Right Start. In 2003, F.A.O. Schwarz filed for not one but two bankruptcies, and in January 2004 the New York store closed.

And then it came back to life, a toy with a new battery, courtesy of D.E. Shaw, a private equity firm run by a man of the same name, for $41 million. "Dave Shaw is a genius for making money, but even his partners looked at this deal and wondered what he was doing," Fritz Jr. told me. (He did point out that Shaw's mother collected antique dolls.) There followed an enormous investment in a redesign of the flagship store by the architect David Rockwell— LED lights on the ceiling that mimicked the clouds over Central Park, huge open spaces for play—and the store reopened. It survived but did not thrive. In 2009 it was acquired by Toys R Us for, as one industry insider put it, "next to nothing."

Toys R Us may yet bring back F.A.O. Schwarz in another Manhattan location. Meanwhile, it is gone but still there. Brands never really die. They just lie in state until the time is right to rise again. Perhaps F.A.O. Schwarz will be back elsewhere in the city in a year's time. Some industry figures think that the obvious move is for it to become stand-alone boutiques within Toys R Us stores. But the mass market pres- sure, in which every five-year-old covets a Minion, is greater than ever. Yet even in an era dominated by online behemoths, there is room for specialty goods: food, booze. Why not toys?

Judith Ellis, who founded and runs the toy design department at the Fashion Insti- tute of Technology, pointed out that there is still a thriving market for specialty toys. "F.A.O. Schwarz would have to go back to being family-owned to attain the magic that it had, if it ever could," she said. "There is an intimate relationship that children have with their toys. And it is the same relationship that the store owner and pub- lic have to have—a singular and personal relationship so people can return to that enchanted place of childhood."

When I pointed out that the ground floor of the Toy Building was now Eataly, and shared my theory that the rise of food culture in this country almost perfectly mirrors the way so much activity in life has been submerged beneath a screen, Ellis agreed. "Everything about food is unique," she said. "Shopping for it, preparing it, sharing it. It's intimate and tactile the way your relationship with your toys was."

Perhaps that is the genius of displaying so many toys beside each other: Somewhere in the mix we find that special one. Which, come to think of it, sounds like a rehearsal for life. And isn't that, in part, what toys should be?