Retail Pulse: FAO Schwarz To Open New Flagship; Amazon Expands Grocery Delivery

Brick-and-mortar retailers have closed flagship locations in recent times, but sometimes these landmark stores make a comeback. News this week surfaced that FAO Schwarz is planning to have a flagship store in New York City once again – this time at Rockefeller Center instead of the Fifth Avenue location where Tom Hanks tapped out “Chopsticks” on a dance-on piano in the 1988 movie “Big.”

The new store, which will be located at 30 Rockefeller Plaza, will feature multiple experiential retail components. For starters, the space will have the iconic dance-on piano as well as a build-your-own RC race car station. The store will also offer magic shows and a grocery shopping experience designed for kids. Beyond New York, the retailer is planning to extend that experiential approach to partner locations, “offering the world that one-of-a-kind toy retail experience the brand is known for,” according to an announcement from the company, which is owned by ThreeSixty Brands.

And another flagship is in the works thousands of miles away from Manhattan: The company is planning a 27,000-square-foot location in Beijing, along with “additional stores and pop-ups [that] will open over the next few years,” according to the retailer. To help expand to other countries, FAO Schwarz is taking on a strategy that has become popular with brands seeking to test brick-and-mortar experiences, as it plans to open pop-up shops with the help of retail partners in North America, Europe and Australia.

In Canada, the company plans to open pop-ups in Hudson’s Bay stores that will have floor plans ranging from 300 to 1,200 square feet. That relationship will also provide omnichannel experiences, as consumers will be able to buy items through the retailer’s eCommerce website. And other global FAO Schwarz pop-up shops are in the works with the help of Selfridges in the United Kingdom, El Corte Ingles in Spain and Myer Australia in Australia. In the announcement, ThreeSixty Brands CEO David Conn said, “the expansion to these countries further exemplifies FAO Schwarz as a global kids’ lifestyle brand.”

Back home in New York, news this week came that BuzzFeed is planning to open a toy store in New York City later this fall. The store, called Camp, will be located in an 11,000-square-foot space in Manhattan’s Flatiron District. The store will feature an experiential area where visitors can take photos to share on social media, showing that toy stores are becoming destinations as well as places to shop.

In Other Brick and Mortar News

Sears Holdings is reportedly working with boutique consulting firm M-III Partners to prepare a bankruptcy filing as it faces a large debt payment. Sources familiar with the matter told The Wall Street Journal that M-III Partners staff has been at the company’s headquarters. However, the sources said the retailer is looking into alternatives to avoid a restructuring in court.

While $134 million worth of debt comes due for Sears on Monday (Oct. 15), Sears CEO Edward Lampert could make the payment. Lampert is also the company’s largest creditor and shareholder. Sources have also said that Lampert has asked AlixPartners, Lazard and lawyers at Weil, Gotshal & Manges LLP for advice.

And Starbucks has a new investor: Pershing Square Capital Management, the activist hedge fund controlled by activist investor William Ackman, now has about a 1.1 percent stake in Starbucks. The Wall Street Journal, citing comments Ackman made at the Grant’s Interest Rate Observer conference in New York, reported that he called Starbucks one of the “most dominant companies in the industry we’ve ever seen.”

On another note, Amazon and Whole Foods’ Prime Now is now available in Annapolis, North and Central New Jersey, Cleveland, Louisville, Pittsburgh and more areas of San Francisco, according to an announcement. Whole Foods Market’s Executive Vice President of Operations Christina Minardi said in the announcement, “Prime Now delivery continues to be a hit with our customers, and we’re excited to introduce the service in five new cities, plus more neighborhoods in the San Francisco Bay Area.”

Prime Now Grocery pickup, which came to market in August, is now available in eight cities, and Amazon said it has plans for continued expansion. In September, Amazon and Whole Foods Market brought the service to Ann Arbor, Detroit, Jacksonville, Milwaukee, Madison, Omaha, St. Louis, Orlando, Tampa and Tulsa, as well as additional areas of New York City and Seattle, the company said in an announcement.

For more news on grocery pickup and delivery, and the latest in retail news, read next week’s Retail Pulse.


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