Target joins forces with FAO Schwarz for holiday season toy domination

Brian Sozzi
·Executive Editor
Updated ·3 min read

Target (TGT) continues to unleash its inner beast on toy rivals ahead of a holiday shopping season.

The discount retailer said Thursday it will join forces with iconic toy seller FAO Schwarz for an exclusive 70-piece toy collection at all of its 1,900 stores and online. It marks the first time the two retailers have worked together. The collection will debut later this month.

As an added wrinkle, the well-known FAO Schwarz store in New York City will carry more than 300 items from Target’s private labels including Cat & Jack and Pillowfort.

“This year’s exclusive FAO Schwarz collection and our largest Bullseye’s Top Toys list ever provides something new and exciting for kids of all ages, all at an incredible value,” said Target executive vice president and chief merchandising officer Christina Hennington in a statement. “We also recognize our guests have a lot to think about this holiday season, and we hope they find comfort in the safe, easy experiences we’ve created, whether shopping in our stores or using one of our convenient fulfillment options.”

Yahoo Finance isn’t surprised to hear of the tie-up. Ever since Toys R Us entered liquidation in September 2017, Target chairman and CEO Brian Cornell has been on a mission to make his stores the destination for toys.

After the Toys R Us bust (the retail chain was gone by June 2018), Target added about 245,000 square feet of space devoted to selling toys at about 500 stores for Black Friday 2018. Not only did Target boost space for toys, it also completely refreshed the look of store aisles to make them more inviting to shop. It added more inventory, too. These enlarged toy spaces continue to be used in Target stores.

In this Wednesday, Oct. 23, 2019, photo shows a Disney interactive display during a Target Holiday Outlook event in New York. Target Corp. says it's spending $50 million more on payroll during the fourth quarter than it did a year ago so that there'll be more workers on hand to help harried shoppers scrambling to get their shopping done in a shorter amount of time. (AP Photo/Mary Altaffer)

Then come early October 2019, Target linked up with Disney to open 25 Disney branded shops in its store ahead of the holiday season. It has continued to open shops this year. Later in October 2019, Target disclosed it would power the website of the re-launched Toys R Us website. That deal has since expired. Amazon now handles the fulfillment for Toys R Us.

The efforts have paid off in the form of strong toy sales for Target the past two holiday seasons. How the company’s toy business will perform this year, however, is a wildcard as many Americans battle the combination of unemployment, election uncertainty and fear over catching COVID-19. Thus far, signs on holiday toy demand are promising though.

Toy industry sales surged 16% in the U.S. in the first half of the year, according to data from The NPD Group. Outdoor toys and board games were the best-sellers as parents sought out more home entertainment options.

Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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