Table of Contents

1. Key Highlights
2. Introduction
3. A second New York home: what visitors will find inside Nordstrom
4. Nordstrom’s rationale: why the department store is betting on experiential toys
5. FAO Schwarz’s revival: from Fifth Avenue landmark to curated global footprint
6. The “Jewel Box” concept: scaled, immersive shop-within-a-shop
7. Experiential retail in practice: how interactive toys draw shoppers back into stores
8. Risks and constraints: what could limit the partnership’s success
9. Competitive context: how this fits into the toy and department-store landscape
10. What the partnership means for families and gift buyers
11. Measuring success: what metrics will matter to both partners
12. Broader implications for physical retail and brand partnerships
13. Looking ahead: what to watch for in the next 12–24 months
14. Practical advice for shoppers and mall operators
15. FAQ

Key Highlights

• FAO Schwarz opened a second Manhattan location inside Nordstrom’s West 57th Street flagship and will sell products through Nordstrom’s website, with plans to roll assortments into stores nationwide.
• The partnership pairs FAO Schwarz’s experiential, heritage-driven toy brand with Nordstrom’s store footprint and service reputation; eight Nordstrom locations will host enhanced “Jewel Box” shop-within-a-shop concepts.
• The tie-up reflects a broader retail strategy: brands leaning into curated, interactive experiences to drive foot traffic, differentiate from pure e-commerce, and capture family shopping occasions.

Introduction

FAO Schwarz, the toy store synonymous with towering plush animals and the giant dance-on piano from the film Big, has returned to an expanded presence in New York City. Its new space inside Nordstrom’s Midtown flagship on West 57th Street marks the first time in more than a century the brand operates two Manhattan locations simultaneously. The opening is far more than a concession; it initiates a strategic partnership that will place FAO Schwarz merchandise on Nordstrom’s website and ultimately introduce branded assortments—plus a highly curated “Jewel Box” format—into stores across the department store’s national footprint.

This move arrives at a pivotal moment for both companies. Nordstrom, freed from public-market pressures after a 2024 privatization deal, can invest in long-term differentiation. FAO Schwarz, after a multi-year revival led by targeted locations, licensing and partnerships, gains a nationwide retail platform. The collaboration crystallizes two trends reshaping retail: the premium placed on in-store experiences and the search for combinations that pull families into physical stores.

A second New York home: what visitors will find inside Nordstrom

The new FAO Schwarz space inside Nordstrom recreates the elements most closely tied to the brand’s identity: larger-than-life stuffed animals, toy soldiers that frame the entrance, and a playable version of the signature floor piano. Interactive stations invite hands-on engagement—customers can personalize handbags, assemble custom makeup kits, adopt dolls complete with birth certificates, and configure Brio train sets. Product demonstrations and storytelling sit at the center of the experience rather than conventional rack-and-shelf merchandising.

Walk-in customers encounter a curated selection of toys and activities designed to appeal to family groups and gift buyers. The layout intentionally supports multiple simultaneous experiences: a child can play on the piano while a parent oversees a customization station. That combination of spectacle and service echoes the approach FAO Schwarz deployed at its Rockefeller Center flagship: focus on moments that generate memories, social-media shareability and reasons to linger.

The in-store programming also reflects a retail calculation. Toys remain a category that elicits immediate, emotional purchases. When toys are displayed as part of an interactive moment, conversion rates, basket size and impulse purchase frequency tend to rise. Nordstrom’s concession model gives FAO Schwarz access to department-store customers who come for apparel, shoes or beauty and leave with a toy or gift—turning routine trips into multi-category visits.

Nordstrom’s rationale: why the department store is betting on experiential toys

Department stores face a persistent strategic question: how to remain relevant to consumers who increasingly begin shopping online and expect distinct in-store value. Nordstrom’s decision to host FAO Schwarz reflects several strategic priorities:

• Drive family foot traffic: Department stores historically compete for holiday shoppers and family outings. A high-profile toy brand strengthens Nordstrom’s pull for groups seeking in-person discovery and gifting solutions.
• Differentiate through service and curation: Nordstrom is known for customer service and selection. FAO Schwarz brings exclusive items and interactive programming that support a differentiated shopping proposition versus mass merchants and online marketplaces.
• Expand omni-channel assortment: Integrating FAO Schwarz into Nordstrom’s site strengthens the department store’s online toy assortment while allowing experimentation with inventory and marketing without committing to costly, full-line in-store rollouts.
• Long-term brand alliances: After returning to private ownership at the end of 2024, Nordstrom can commit to multi-year partnerships that may yield payoff only over time. The FAO Schwarz tie-up exemplifies a partnership that prioritizes long-term traffic and brand-building over immediate quarterly metrics.

This choice follows a broader pattern. Retailers are partnering with heritage brands and experience-centered operators to create destination moments that cannot be easily replicated online. By putting FAO Schwarz at the core of a family-oriented strategy, Nordstrom leverages a brand with built-in cultural resonance and holiday cachet.

FAO Schwarz’s revival: from Fifth Avenue landmark to curated global footprint

FAO Schwarz began in 1862 in Baltimore and moved to New York in 1870. Its Fifth Avenue flagship, opened in 1931, became an icon: holiday catalogues, celebrity visits and repeated film appearances reinforced the store’s status. The piano scene in Big sealed FAO Schwarz’s place in popular culture. That prominence did not insulate the company from the pressures of rising rents, shifting consumer behavior and repeated ownership changes; the Fifth Avenue flagship closed in 2015 after various bankruptcies and owners, including stints connected to Right Start and Toys "R" Us.

The brand’s modern rebirth began with the 2016 acquisition by ThreeSixty Group. Rather than attempt to recreate an enormous Fifth Avenue playground, new owners focused on curated locations, brand licensing and demonstrative retail formats. A Rockefeller Center flagship opened in 2018 with an emphasis on demonstrations, exclusive merchandise, and interactive play. FAO Schwarz further expanded through international shop-in-shops in cities such as London, Dublin, Paris, Milan and Beijing.

FAO Schwarz’s model shifted from depending on a single massive destination to creating multiple touchpoints: concessions inside major retailers, temporary activations, and selective standalone flagships positioned around tourism and high foot traffic. The Target partnership that began in 2022 added an important distribution path, exposing FAO Schwarz products to younger families who might never have visited a flagship store. The Nordstrom partnership now offers a complementary route—premium environments and service-oriented customers.

What defines FAO Schwarz’s strategy is intentional curation. Limited-edition items, personalization opportunities, and programmed events become revenue drivers. The experiential elements support higher average transaction values and provide marketing content that fuels both in-store and digital discovery.

The “Jewel Box” concept: scaled, immersive shop-within-a-shop

Nordstrom’s nationwide rollout plans include a scaled shop-within-a-shop format known as the “Jewel Box.” Eight Nordstrom locations will receive this enhanced format: three in California (Brea Mall in Brea; South Coast Plaza in Costa Mesa; Fashion Valley in San Diego), plus Aventura Mall in Miami; Oak Brook Mall in Illinois; Garden State Plaza in New Jersey; NorthPark Center in Dallas; and Bellevue Square in Washington.

The Jewel Box is more than a display bay. It’s an elevated environment designed for storytelling, demonstrations, and brand activations. Staffed to support hands-on experiences, the Jewel Box will feature product demos, customization services, and scheduled events. The format functions as a testbed: Nordstrom and FAO Schwarz can refine pricing, staffing, product mix and event programming in these markets before broader deployment.

Why the Jewel Box matters:

• Controlled environment for experiential retail: Compared with a standard concession, the Jewel Box allows FAO Schwarz to curate sightlines, sound, and traffic flow to maximize interactivity.
• Measured rollouts and learning loops: Placing Jewel Boxes in geographically diverse, high-traffic malls creates a reliable sampling of consumer response across different markets.
• Scalability without excessive risk: Department-store floor space is costly. A compact, high-impact format can deliver disproportionate returns on a smaller footprint.

This approach mirrors strategies other brands have adopted when scaling experiences within larger retail hosts. Successful rollouts will depend on consistent staffing, thoughtful merchandising, and marketing that draws families during both peak shopping seasons and off-peak times.

Experiential retail in practice: how interactive toys draw shoppers back into stores

Experiential retail is no longer merely a marketing buzzword. It’s a response to a structural challenge: e-commerce offers convenience and selection, but physical stores can offer sensory engagement, immediacy and social experiences. In the toy category, those advantages play out clearly.

Interactivity increases dwell time. A child engaged with a train set or plush play area stays longer; a longer visit multiplies the chances of an additional purchase. The spectacle of a giant piano or a robotics demonstration offers social-media-friendly moments that drive free marketing and word-of-mouth. Retailers that devise repeatable, shareable experiences can convert those moments into sustained relevance.

Major examples that underscore the model:

• LEGO stores: Flagships and larger retail formats emphasize hands-on play tables, build zones, and in-store events to encourage extended visits and loyalty.
• Build-A-Bear: The brand’s customization process turns a transaction into an event. Guests participate in designing and naming a toy, creating ownership and emotional attachment that supports repeat visits and gifting behavior.
• Apple Stores: Though in a different product category, Apple’s focus on service, demo tables, and workshops demonstrates how a service-first physical format can support premium pricing and brand loyalty.

These examples confirm a practical truth: product alone rarely creates sufficient in-store demand. Programming—events, personalization, demonstrations—transforms product into an occasion. For FAO Schwarz, that has always been the point; the piano in Big is emblematic because it converted a store visit into an unforgettable experience.

Nordstrom benefits when FAO Schwarz’s experiences bring families into stores. Once inside, visitors interact with apparel, shoes, beauty and other categories. The cross-selling potential underpins the partnership’s business case.

Risks and constraints: what could limit the partnership’s success

The FAO Schwarz–Nordstrom partnership has strategic logic, but several risks and operational challenges could blunt outcomes:

• Execution risk: Experiential retail depends on consistent quality—trained staff, well-executed events, reliable inventory. Failures in service or programming will erode the brand halo rather than enhance it.
• Space economics: Premium mall and department-store floorspace is expensive. The Jewel Box model mitigates this with compact footprints, but conversion rates must justify the real estate and staffing investments.
• Brand dilution: Expanding into numerous concessions or big-box partners risks diluting FAO Schwarz’s mystique if product becomes too ubiquitous or too mass-market.
• Supply chain and inventory complexity: Customization stations and exclusive items require nimble supply chains and reliable fulfillment. If exclusives sell through without restock plans, consumer frustration may follow.
• Channel conflict: FAO Schwarz’s prior partnership with Target illustrates how multiple retail arrangements can complicate brand positioning. Clear differentiation across partners—both in product assortments and price points—will be critical.

These risks are manageable with disciplined strategy. Careful placement of Jewel Boxes, exclusive assortments for premium partners, and rigorous staff training can preserve both the customer experience and brand equity. Nordstrom’s private ownership provides runway for that kind of measured investment, but success will hinge on execution.

Competitive context: how this fits into the toy and department-store landscape

The toy sector sits at the intersection of specialty retailers, mass merchants, and online platforms. Historically, stores such as Toys "R" Us dominated niche retail; their decline opened space for new formats. Department stores and mass merchandisers both seek to capture share of family shopping occasions.

Key competitive dynamics:

• Online convenience vs. in-person discovery: Shoppers often search and compare online but still value tactile evaluation—particularly for toys. Stores that offer both digital selection and in-person play walls hold an advantage.
• Holiday concentration: Toy sales concentrate heavily around holidays. Brands and retailers that create compelling in-store destinations can capture a larger share of this seasonal spending.
• Experience-driven loyalty: Families with young children value experiences. Brands that deliver memorable moments gain repeat traffic not just for toys but for birthday gifts and special-occasion purchases.
• Partnerships as growth engines: Licensing and concessions allow brands to scale without bearing full store operating costs. For FAO Schwarz, partnering with Nordstrom complements its concession approach and leverages Nordstrom’s customer base and distribution.

Competitors will watch closely. If Jewel Boxes succeed, other department stores may pursue similar partnerships or attempt to create proprietary experiential categories. Retailers that lack event programming or cannot staff interactive formats effectively will find it difficult to defend market share.

What the partnership means for families and gift buyers

For shoppers, the immediate effects are tangible. Families can now access FAO Schwarz’s curated assortments within a major department store environment that offers easier parking, returns, and cross-category shopping compared with a standalone toy flagship. The interactive stations and personalization services create additional reasons to choose Nordstrom when buying gifts or planning a mall visit.

Consider practical scenarios:

• A parent shopping for winter coats can pair the trip with a planned stop at the Jewel Box, purchasing a gift and leaving with both necessities and an experiential memory for their child.
• Tourists visiting Manhattan gain another FAO Schwarz touchpoint besides Rockefeller Center, increasing the brand’s visibility and opportunity for souvenir purchases.
• Gift buyers who start their search online may discover FAO Schwarz assortments on Nordstrom.com, then reserve or purchase in-store to access personalization services.

For parents, the in-store experience also reduces uncertainty. Instead of arriving home to an unwanted toy, a child can try the product before a purchase. Customization services increase gift perceived value, enhancing the likelihood of repeat buying.

Measuring success: what metrics will matter to both partners

Performance metrics will determine whether this alliance becomes a template for future retail partnerships. Key metrics include:

• Foot traffic uplift: The degree to which FAO Schwarz increases mall or store visits, particularly among families.
• Conversion rate and dwell time: How interactions with interactive stations translate into purchases and time spent in-store.
• Average transaction value and attachment rate: Whether shoppers add more items to their baskets when experiencing FAO Schwarz offerings.
• Digital engagement: Traffic to Nordstrom’s FAO Schwarz product pages, online conversion and the interplay between web discovery and in-store pickup or visit.
• Brand health indicators: Social mentions, earned media, and customer satisfaction scores tied to the experiential programming.

Short-term success may show up most strongly during holiday seasons. Long-term success requires consistent programming that drives repeat visits outside peak shopping windows.

Broader implications for physical retail and brand partnerships

This partnership underscores a strategic pivot for many retailers: physical stores should not merely be fulfillment hubs or showroom extensions of e-commerce. Carefully curated brand partnerships can transform retail spaces into places of curiosity, learning and celebration. FAO Schwarz’s model—heritage + spectacle + personalization—provides a playbook for brands that possess distinctive IP and want to scale experiences without the capital burden of standalone stores.

For department stores, the lesson is clear: investing in differentiated, service-oriented categories creates reasons to visit beyond browsing for apparel. For brands, strategic retail partnerships provide scale and distribution while preserving experiential control if formats like the Jewel Box are tightly managed.

Retailers already experimenting with similar approaches include apparel brands hosting in-store activations, food brands operating micro-restaurants inside department stores, and technology vendors embedding demo centers. The successful partnerships will be those that balance scale with curation, preserving the brand’s essence while making it accessible to new audiences.

Looking ahead: what to watch for in the next 12–24 months

Several developments will indicate whether the FAO Schwarz–Nordstrom partnership achieves its stated goals:

• Jewel Box performance: Early learnings from the eight initial locations will reveal whether the format produces sustainable incremental sales and repeat traffic.
• Calendar programming: How frequently Nordstrom and FAO Schwarz schedule events—storytimes, demonstrations, holiday activations—will indicate operational commitment.
• Online-offline integration: The degree to which Nordstrom’s e-commerce experience pairs with in-store offerings, including buy-online-pickup-in-store (BOPIS), exclusive online assortments, or in-store reservation capabilities.
• Channel differentiation: Whether FAO Schwarz maintains differentiated assortments across partners (Target, Nordstrom, standalone stores) to prevent consumer confusion and brand dilution.
• Geographic expansion: If Jewel Boxes and concessions succeed, expect additional Nordstrom locations and possibly further global partnerships.

The stakes are not solely commercial. Successful execution will also influence how heritage brands approach revivals: whether they prioritize experiential partnerships and curated in-store moments over singular destination flagships.

Practical advice for shoppers and mall operators

Shoppers:

• Check Nordstrom’s website for FAO Schwarz product availability and event schedules. Popular demos and personalization slots may require reservations at peak times.
• Consider timing visits outside of holiday peaks to fully enjoy hands-on experiences with less crowding.
• Look for exclusive items within the Jewel Box format that may not be available at mass-market partners.

Mall operators and retailers:

• Factor experiential partners into tenant mixes strategically; interactive brands can boost overall center dwell time and sales across categories.
• Invest in training and operations support. The quality of staff interactions will determine whether experiences translate into revenue.
• Leverage local events and partnerships—storytimes, local author visits and school partnerships—to integrate experiential retail into community life rather than treating it as a seasonal novelty.

FAQ

Q: Where exactly is the new FAO Schwarz location in New York? A: FAO Schwarz opened a concession inside Nordstrom’s flagship on West 57th Street in Manhattan. The brand continues to operate its Rockefeller Center flagship as well, making this the first time in over a century FAO Schwarz has two New York locations simultaneously.

Q: Will FAO Schwarz products be available across all Nordstrom stores immediately? A: The plan is to roll FAO Schwarz assortments into Nordstrom stores nationwide over time. Initially, Nordstrom will place complete assortments on its website and deploy a limited number of enhanced “Jewel Box” shop-within-a-shop formats in eight specific Nordstrom locations to test and refine the concept.

Q: Which Nordstrom locations will receive the Jewel Box format? A: The eight initial Jewel Boxes will be located at three California sites—Brea Mall (Brea), South Coast Plaza (Costa Mesa), and Fashion Valley (San Diego)—plus Aventura Mall (Miami); Oak Brook Mall (Oak Brook, Illinois); Garden State Plaza (New Jersey); NorthPark (Dallas); and Bellevue Square (Washington).

Q: How does this partnership affect FAO Schwarz’s other retail partnerships, such as the Target arrangement? A: FAO Schwarz has pursued multiple partnerships to broaden its reach. The introduction of FAO Schwarz assortments into Nordstrom represents a complementary—but distinct—channel focused on premium, service-oriented customers. Details about how assortments and exclusives will differ across partners will be determined by FAO Schwarz and its retail collaborators to prevent channel overlap and brand dilution.

Q: Why is Nordstrom investing in an experiential toy brand now? A: Nordstrom has greater flexibility to pursue long-term strategies after being taken private at the end of 2024. FAO Schwarz provides a proven experiential brand that can attract family foot traffic, differentiate the department-store experience, and create higher conversion through curated programming and personalization.

Q: What kinds of experiences will shoppers find at Jewel Boxes and concessions? A: Expect interactive stations where customers can personalize products, try toys before buying, and participate in demonstrations or storytelling events. Activities may include adopting dolls with birth certificates, custom handbag stamping, build-and-play train setups, and opportunities to play the iconic FAO Schwarz piano.

Q: Are these formats expected to boost holiday sales significantly? A: Experiential formats typically drive greater holiday traffic because they create destination moments. Jewel Boxes and in-store FAO Schwarz experiences are designed to increase dwell time and basket size, both key to lifting seasonal sales. The most definitive results will emerge from the first holiday season following the rollout and the performance of those initial locations.

Q: Could this strategy dilute FAO Schwarz’s heritage? A: Broad distribution always carries a risk of dilution. FAO Schwarz and Nordstrom can mitigate that risk through selective assortments, maintaining premium exclusives, and ensuring the experiential elements remain central to the brand’s identity. Successful scaling will rely on preserving the storytelling and interaction that define FAO Schwarz.

Q: What will determine whether this partnership serves as a model for other retailers? A: Execution will be decisive. If Jewel Boxes and concessions produce consistent traffic lift, strong conversion, and repeat visits, other retailers will likely pursue similar tie-ups. Metrics Nordstrom and FAO Schwarz will monitor include foot traffic, average transaction value, attachment rates, dwell time, and customer satisfaction.

Q: How should families plan visits to enjoy FAO Schwarz experiences without long waits? A: Check Nordstrom’s site for event schedules and any reservation systems. Off-peak weekday hours and non-holiday periods typically offer shorter lines and more staff availability for personalization services. For high-demand offerings, consider booking or inquiring about scheduled demo times.

The Nordstrom–FAO Schwarz partnership blends heritage brand storytelling with modern retail economics. It leverages curated experiences to drive visitation while testing a scalable, high-impact format in the Jewel Box. If executed with discipline—careful assortment differentiation, robust staffing and consistent programming—the collaboration could reshape how department stores court families and how toy brands scale experiential retail without losing their mystique. The first year of deployments will determine whether this combination reestablishes FAO Schwarz as a national, experiential fixture and strengthens Nordstrom’s proposition as a destination for purpose-driven, multi-category shopping.