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FAO Schwarz Setting Up Boutiques In Toys R Us Stores

Toys R Us will announce today that it is adding upscale FAO Schwarz toy boutiques to its 585 stores beginning Nov. 1, Kayce T. Ataiyero reports. They will sell lower-priced offerings, ranging from a $2.99 yo-yo to a piano mat like the one Tom Hanks danced on in the movie "Big" for $64.99.

Toys R Us is no doubt strengthening its image with the alliance, says Kloster Trading Corp. toy analyst Lutz Muller. "FAO Schwarz is something [consumers] have heard of but not seen in their stores. For the first time, they can go in and see it."

But the high-end brand could lose some of its luster by associating with the hoi polloi, Muller cautions. Toys R Us chairman and CEO Gerald Storch doesn't think so, of course. "We don't believe it devalues the brand. It democratizes the brand and makes it available for everyone," he says. "Quality doesn't have to cost an arm and a leg."

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