NEW YORK — Toys R Us has acquired FAO Schwarz, which has struggled for years through bankruptcies amid tough competition from discount stores.
Analysts said privately held FAO Schwarz was in danger of closing if a buyer did not materialize. Privately held Toys R Us, the largest U.S. toy retailer, meanwhile, will get a chance to work with smaller vendors, cut costs and operate a marquee N.Y. store.
Although not immune to the competition from discounters, Toys R Us has had stronger results. Its CEO Jerry Storch said the move could give it a leg up on discounters.
Although the company declined to give specific financial details, "the feeling is they got it for very, very, cheap," said toy analyst Jim Silver.