2015 will go down in New York’s storied retail history as the year when the city lost two of its flagship toy stores. At 6:00 p.m. on December 30, Toys “R” Us will shut down its Times Square store at West 44th Street and Broadway. The retail giant decided not to renew the lease due to ever-rising rents in the pedestrian-heavy neighborhood. Earlier in July, the company closed the famous FAO Schwarz store on at 767 Fifth Avenue, which had served the city since 1986.
On August 1, 2000, Toys “R” Us announced its plans to build a new flagship store at the Crossroads of the World. At that time, Times Square was still in its active renaissance phase, rapidly shedding its notoriously seedy past in favor of a family-friendly, tourist-oriented, sanitized image. The move to the intersection of Broadway, Seventh Avenue, and 44th Street would put the store in the middle of the Theater District and across the street from ABC’s Good Morning America studios, as well as the MTV music studios. The store would anchor the rapidly growing retail district. Its initially proposed 101,000 square feet would make it one third larger than the Virgin Megastore a block north. TV ads featured the store’s mascot, Geoffrey the Giraffe, inviting kids and their parents to the world’s largest toy store.
In November 2001, the toy retailer opened its 110,000 square foot flagship location. The self-described “World’s Greatest Toy Store®” had a strong claim to the grandiose title. Its four levels are centered on a grand atrium that houses a 60-foot Ferris wheel. Each of the wheel’s fourteen cabs is uniquely themed after toys and children’s entertainment characters ranging from time-rested classics to new popular franchises.
On the second floor, a 20-foot-high and 34-foot-long animatronic T. rex roars and shakes its tail at the entrance to the dinosaur section. The dinosaur shares the high ceiling space with Superman breaking the fall of a truck, suspended above an action hero zone.
At 25 feet to its pinnacle, a LEGO model of the Empire State Building rises higher than the dinosaur’s head. Together with a similarly scaled Chrysler, Woolworth, Lipstick, and Hearst Magazine Buildings, as well as the Statue of Liberty, the models form an indoor skyline that towers over the LEGO section, beyond which lies a “life-size”, accessible Barbie Dollhouse.
Some of the other attractions on the long list of features include the FAO Schwarz-themed Candy Land section, an Astro Kids zone where children would pick out a selection of “rare” stones and minerals, an electronics section, a Babies R Us division, and more. A UPS branch is located at the lower level, allowing customers to ship their purchases to friends and relatives around the country and beyond without leaving the premises.
The four levels surround the central atrium with a 360 degree enclosure of balconies, while two glass elevators and a neon-bound bank of escalators provide vertical access.
At this moment, the Ferris wheel continues to entertain children and their parents, yet the shelves around are already a forlorn shadow of their former glory. Enticed by steep discounts, customers are snatching up the remaining wares while the store is slowly closing off various sections. The top level was shut down over a week ago, and 373 employees are facing layoffs.
“It is certainly bittersweet,” the company’s CEO Dave Brandon said in an interview with CNNMoney. In the same segment, Brandon expresses optimism regarding their search for a new, presumably more cheaply priced, location in the Times Square area. Meanwhile, the company announced plans to open a new 55,000 square foot location at the American Dream project, formerly known as Xanadu, across the Hudson River at the Meadowlands in New Jersey. Despite its current density, the Theater District continues to add new retail offerings, such as at the new 8,000-square-foot building that is being constructed at 719 Seventh Avenue several blocks to the north.
The toy store is being priced out of the Bow Tie Building at 1530 Broadway, the flagship property of the Bow Tie Partners. Although the company claims its name in part of the neckwear of choice of Charles B. Moss, Sr., the second generation owner of the company, it is also named for the 145,000-square-foot retail space at the center of the “bowtie” of Times Square at the intersection of Broadway and Seventh Avenue. Over 50,000 pedestrians are reported to pass by the building each day. The storefront and the nine rooftop billboards are seen by over 1.5 million motorists, pedestrians, and TV viewers every day.
The four-story building is a rarity for the high-rise district of Midtown Manhattan, where large new buildings almost universally rise dozens of stories into the air. In a sense, it follows the model of the district’s most famous building at One Times Square at the southern end of the grand intersection. Although the hundred-plus year-old building was built as an office tower, most of the skyscraper’s 25 stories are empty. The structure is more profitable as an advertisement anchor, and made $23 million from billboard revenue in 2012. Additional income streams from three stories of retail space at the lower floors. Though the Bowtie Building operates on the same retail-billboard business model, its priorities are reversed as the massive retail space is the primary attraction.
While the toy store occupied the majority of the structure for fourteen years and one month, additional, unrelated shops are located at the north end of the building, which will continue their operation. The space of the toy store itself will be separated into two 31,000 square foot sections, one housing the new flagship store for Gap and the other for Old Navy. Though the fate of the Ferris wheel, the dinosaur, and the other large-scale features remains unclear, somehow we doubt that the apparel giant will offer its guests rides in a clothing-themed amusement ride.
It is also not known whether the new stores will make use of the current billboard systems on the front façade, where a grid of banners rotates upon a series of pins to present a shifting advertisement tapestry.
Both Toys “R” Us Times Square and FAO Schwarz have been brought down by the double hit combo of rising rents and growing market competition.
Since the opening of Toys “R” Us Times Square in 2001, the asking rent at the venue has doubled, reaching $2,500 per square foot at the ground floor, $350 per square foot at the second floor and $150 per square foot rent at the lower level. The store’s surroundings are quite different than what it was fifteen years ago. The city’s tourist industry has experienced an upsurge, large portions of Broadway have been closed to vehicular traffic and repurposed as pedestrian spaces, and the number of visitors has surged to 50 million per year, making it the world’s third busiest tourist attraction, according to Travel+Leisure.
FAO Schwarz was located at the General Motors Building at 767 Fifth Avenue, which was listed as the city’s most valuable building at around $3.4 billion in 2013. Though FAO Schwarz has been at its Fifth Avenue and 59th Street location since 1986, its place as the building’s trophy retail property was usurped in 2006 by the new flagship Apple Store. Its now-famous glass cube replaces the former sunken plaza in front of the office tower.
The toy store closed its doors in July, amid extensive news coverage and a heavy shopper presence. Visitors queued for one final look at the rows of stuffed animals, the singing clock, and the floor piano made famous by Tom Hanks in the 1998 movie Big.
However, the lease at the expensive location was not up for some time after closing, indicating that high rents were not the only factor that led to decreased profitability. As Fortune Magazine notes, the toy retailer buckled under competition from all-purpose stores such as Amazon, Walmart, and Target, which were able to provide toys at lower prices. Once-famous toy store chains such as KB Toys and Zany Brainy succumbed under the same pressure years ago.
The magazine goes on to suggest that the key problem with the flagship store was its emphasis on sales without a strong attempt to monetize the unique, “magical” experience that cannot be made available online or at an average mall. “They tried to make a profit on items customers didn’t see value in, while simultaneously giving the experience of being in the store away for free,” the article states as it describes the more successful business model of toy retailers down the street, such as The American Girl Store and the Build-A-Bear workshop, both of which offer a truly interactive experience that goes above and beyond an average shopping trip.
Over the past 100 years, Times Square’s landscape has been morphing as dynamically as the ads on its illuminated displays. As times change, another chapter closes in the history of Manhattan’s retail landscape. But until December 30th, you still have a chance to visit the toy store that has been New York’s largest for fifteen years.