Table of Contents

1. Key Highlights:
2. Introduction
3. How the partnership came together
4. The 57th Street FAO Schwarz: retail theater inside a department store
5. The “Jewel Box” roll-out: eight pilot locations and omnichannel reach
6. Merchandising, exclusives and customer experience
7. Commercial arrangements: concession plus wholesale
8. Why toys now: strategic drivers for Nordstrom
9. Competitive dynamics: Macy’s, Toys “R” Us and the experiential arms race
10. Operational and executional challenges
11. Real-world precedents and lessons
12. What this means for toy brands and manufacturers
13. Metrics that will determine success
14. Risks and strategic contingencies
15. What to watch next
16. Strategic takeaways for retailers and brands
17. The broader implications for experiential retail
18. What success looks like—but also what would qualify as failure
19. Final perspective: repositioning a department store with play as a growth lever
20. FAQ

Key Highlights:

• Nordstrom and FAO Schwarz opened a 5,000 sq. ft. FAO Schwarz flagship as a concession inside Nordstrom’s 57th Street flagship, and will install 2,000 sq. ft. “Jewel Box” FAO Schwarz shops in eight top Nordstrom doors, with a broad toy assortment also available online.
• The partnership blends FAO Schwarz’s theatrical, higher-end toy identity with Nordstrom’s service-driven retail model to expand toy merchandising year-round, target younger families, boost gifting credentials and add experiential reasons to visit stores.
• The collaboration uses two commercial models—an FAO-operated concession for the Manhattan flagship and a wholesale relationship for the Jewel Boxes—positioning Nordstrom to scale an experiential, omnichannel toy business while confronting execution, inventory and seasonality risks.

Introduction

A storied toy brand has planted itself inside an upscale department store to propel both names beyond their traditional territories. On 57th Street and Broadway, where luxury, tourism and commerce intersect, Nordstrom opened a 5,000-square-foot FAO Schwarz flagship on its Lower Level 2. The installation is not simply a new department; it signals a deliberate strategic push by Nordstrom to modernize and expand its toy business—moving from a modest, seasonal assortment into a year-round, experiential offering anchored by FAO Schwarz’s theatrical DNA.

Nordstrom’s approach combines a leased, FAO-operated flagship in Manhattan, smaller branded “Jewel Box” shops in eight leading stores across the U.S., an expanded online assortment and even an in-store restaurant concept called Picnic on 57th. The arrangement layers retail formats and merchandising strategies to capture younger customers, strengthen gifting credibility and add family-friendly destinations to Nordstrom’s store portfolio. The partnership raises questions that go beyond two companies collaborating: What does experiential play-driven retail look like in 2026? How do legacy toy names and modern department stores co-create relevance? And which retail playbooks will win as consumer behavior, holiday competition and omnichannel expectations collide?

This report examines what Nordstrom and FAO Schwarz built, why they built it, how it will be merchandised and operated, and what the move means for competitors, toy brands and the evolving in-store experience.

How the partnership came together

Nordstrom’s toy business was modest and largely seasonal for nearly a decade. The retailer began carrying a limited, carefully chosen toy assortment about eight years before this expansion, restricting the category mostly to holiday. Customer feedback and holiday performance prompted a reassessment: in 2025 Nordstrom tripled its toy assortment online and in stores, expanded marketplace offerings and added larger items such as scooters and bikes by leveraging third-party fulfillment. The response validated demand and opened a corridor for further investment.

FAO Schwarz, known for theatrical retail moments—the Dance-on Piano, life-like plush animals, toy soldiers and elaborate clock towers—has pursued selective partnerships and standalone flagships since being acquired and relaunched in recent years. The brand’s 30 Rockefeller Plaza flagship, opened by the ThreeSixty Group in 2018, re-established FAO Schwarz’s physical presence after a turbulent period. FAO Schwarz’s leadership welcomed a second New York flagship and identified an opportunity to partner with a specialty retailer whose customer service and store standards aligned with its upscale positioning.

Conversations between Nordstrom and FAO Schwarz focused on complementary strengths. Nordstrom offered store footprint, customer relationships, merchandising know-how and omnichannel capability. FAO Schwarz brought experiential theater, product exclusives, and decades of toy-brand cachet—"196 years" of retail heritage, as one Nordstrom executive put it. The result: a concession flagship at Nordstrom 57th Street that FAO Schwarz will own, operate and merchandise, and a wholesale arrangement whereby Nordstrom will purchase FAO merchandise to stock 2,000-square-foot Jewel Boxes and curated assortments online and across most stores.

David Niggli, FAO Schwarz’s chief merchandising officer, framed the fit succinctly: Nordstrom’s specialty-driven assortment and service orientation made it a “perfect partner” for FAO Schwarz. Nordstrom’s toys executive, Tacey Powers, described the partnership as a way to learn from FAO Schwarz’s theatrical approach while scaling a more robust toy program.

The 57th Street FAO Schwarz: retail theater inside a department store

The new FAO Schwarz inside Nordstrom is deliberately theatrical. At 5,000 square feet it is sizeable for a concession, occupying Lower Level 2 of Nordstrom’s flagship in Manhattan. It includes many of FAO Schwarz’s signature interactive experiences: the Dance-on Piano, Toy Soldiers, Clock Towers and large, lifelike plush animals. Beyond nostalgia plays, the assortment will include fashion and beauty toys, creativity and music items, preschool goods, vehicles, and specialty brands like Brio, Bunnies by the Bay and Djeco.

FAO Schwarz also plans exclusive and category-expanding launches at the Nordstrom location—particularly in infant and preschool—plus experiential activations such as FAO-Abulous handbag customization and FAO Beauty, which lets customers build a custom makeup palette. Those features aim to link FAO Schwarz’s theatrical identity to Nordstrom’s higher-end merchandising and services.

Nordstrom complemented the FAO Schwarz concession with its own family-oriented food concept, Picnic on 57th. The food offering, designed to feel like a food truck, sells soft-serve ice cream, boozy milkshakes and family-friendly snacks. While FAO Schwarz operates the toy concession, Picnic on 57th is Nordstrom-owned and operated, giving the store a broader family proposition—play plus refreshments—intended to extend visits and accommodate parents who shop while children engage with in-store experiences.

Design choices emphasize playfulness, discovery and social media-friendly moments. The concession can function as a tourist draw, a family destination for local shoppers and a unique data point in Nordstrom’s merchandising mix: an opportunity to study how experiential toy retail performs across demographics and seasons within a full-line department store.

The “Jewel Box” roll-out: eight pilot locations and omnichannel reach

Nordstrom’s FAO Schwarz strategy includes a national roll-out beyond Manhattan. The retailer will open 2,000-square-foot FAO Schwarz “Jewel Box” shops in eight high-performing Nordstrom stores across the United States. The selected stores are:

• Aventura Mall, Miami
• Bellevue Square, Bellevue, Washington
• Brea Mall, Brea, California
• Garden State Plaza, Paramus, New Jersey
• NorthPark Center, Dallas
• Oak Brook Mall, Oak Brook, Illinois
• South Coast Plaza, Costa Mesa, California
• Fashion Valley, San Diego

These Jewel Boxes are designed as compact, branded experiences: toy demonstrations, storytelling, activations and curated assortments. They will be supported online at nordstrom.com, where FAO Schwarz merchandise will be sold alongside Nordstrom’s expanded toy selection. Elsewhere in Nordstrom’s store network, toys will remain “highly curated,” reflecting store-specific space constraints and customer profiles.

Nordstrom’s selection of Jewel Box locations balanced FAO Schwarz’s desire for presence in specific markets with Nordstrom’s internal performance indicators—stores that already have substantial children’s apparel floors or broader family traffic. The pilot nature of the rollout signals Nordstrom’s intent to test scalability and ROI before committing to a larger national footprint.

The Jewel Boxes are supplied through a wholesale relationship: Nordstrom buys FAO Schwarz merchandise to stock these pod-like shops and to expand the online assortment. The Manhattan concession, by contrast, remains an FAO Schwarz-owned and -operated lease.

The Jewel Box model functions as a hybrid approach to scaling experiential retail: each pod offers a premium branded experience without the overhead of full standalone store operations, while the wholesale relationship simplifies inventory flow and merchandising control for Nordstrom.

Merchandising, exclusives and customer experience

FAO Schwarz’s strength is its curated assortment of iconic and specialty toys, but the brand’s core value lies in experiences. The Nordstrom partnership will showcase both product and theatricality.

Merchandise highlights include:

• FAO Schwarz classics and interactive exhibits such as Dance-on Pianos and Clock Towers.
• Signature plush animals and specialty brands (Brio, Djeco, Bunnies by the Bay).
• Fashion and beauty toys and an expanded selection for infants and preschoolers—marked for exclusive launches.
• FAO-Abulous customization for handbags and FAO Beauty for custom makeup palettes.

Exclusive product launches and customization services can increase perceived value and convert visits into purchases. They also create content opportunities—visitors are likely to photograph and share playful experiences on social platforms—extending the reach of the physical shops.

Nordstrom’s broader toy strategy—tripling assortments in 2025 and expanding marketplace listings—gives it a supply chain and online fulfillment capability to support larger, specialty items and seasonal spikes. The inclusion of larger products like scooters and bikes in the online assortment addresses logistical constraints: stores cannot stock bulky items easily, but omnichannel fulfillment fills that gap.

Service is central to the execution. FAO Schwarz’s merchandising and theatrical installations require specialized staff, knowledgeable demonstrators and regular programming. Nordstrom’s reputation for customer service aligns with this requirement; FAO Schwarz will operate the Manhattan concession directly to preserve brand standards, while Nordstrom will staff and manage Jewel Boxes using FAO-supplied assortments and training.

Commercial arrangements: concession plus wholesale

The partnership uses two commercial models simultaneously—an FAO Schwarz-leased concession at Nordstrom 57th Street and a wholesale purchasing relationship for the Jewel Boxes and online assortment.

Concession (Flagship 57th Street)

• FAO Schwarz owns, operates and merchandises the 5,000 sq. ft. space.
• FAO Schwarz is responsible for staffing, programming and theatrical elements.
• This model allows FAO Schwarz to control brand presentation and customer experience, preserving its marquee identity in a high-profile New York location.

Wholesale (Jewel Boxes and nordstrom.com)

• Nordstrom buys FAO Schwarz merchandise wholesale to merchandise 2,000 sq. ft. Jewel Boxes and expanded assortments online and in select stores.
• Nordstrom controls merchandising, pricing strategies and integration into its loyalty and omnichannel systems.
• This model simplifies operations for Nordstrom while giving FAO Schwarz broader distribution without full operational commitments.

Using both models addresses different priorities: FAO Schwarz secures a flagship presence where brand storytelling matters most; Nordstrom gains curated access to FAO products at scale. The arrangement distributes risk and operational complexity while aligning incentives—FAO Schwarz promotes its brand in a marquee store; Nordstrom builds a differentiated, experiential toy offer.

Why toys now: strategic drivers for Nordstrom

Toys are meaningful for retailers in three distinct ways: as traffic drivers, as high-turn gifting categories and as lifestyle touchpoints that introduce younger customers to a brand. Nordstrom’s expansion into toys addresses each.

1. Traffic and dwell time Interactive toy experiences encourage longer store visits. Children and families that come for the FAO Schwarz experience or a Picnic on 57th snacking moment generate foot traffic that can spill into other departments—children’s apparel, shoes, accessories and beauty. Longer dwell time increases the chance of additional purchases and higher average order values.
2. Gifting credibility and seasonality Toys anchor holiday shopping. Macy’s, historically, has dominated holiday gifting moments with its Thanksgiving Day Parade and Toys ‘R’ Us shops-in-shop. Nordstrom’s FAO Schwarz partnership is a bid to claim share in the lucrative gifting season by broadening its toy assortment and securing an iconic brand that is associated with memorable holiday experiences.
3. Customer lifecycle and younger audiences Capturing young families introduces future lifetime customers to Nordstrom. Children who experience FAO Schwarz at a Nordstrom store may return as teens or adults, bringing their preferences and loyalty into a retailer that has already positioned itself as family-friendly.

Nordstrom’s 2025 expansion—tripling toy assortments and growing marketplace listings—was a test. The FAO Schwarz partnership scales the experiment into a platform-level play: branded experiences, exclusive merchandise and omnichannel reach. Success would deepen Nordstrom’s customer base, particularly among parents and gift buyers, and help the retailer compete against department store rivals for holiday relevance.

Competitive dynamics: Macy’s, Toys “R” Us and the experiential arms race

The holiday toy battle is long-standing. Macy’s Herald Square has leveraged tradition and scale to command perceptions of holiday shopping. Macy’s has also partnered with Toys “R” Us on in-store formats, creating a one-stop destination for seasonal toy shoppers. FAO Schwarz’s upscale positioning differentiates it from the mass-market Toys “R” Us image and aligns better with Nordstrom’s editorial voice.

Other competitive pressures come from specialist experiential concepts:

• LEGO has invested in flagship stores and branded events to cement ties with families.
• Ulta Beauty’s shop-in-shop with Target (launched in 2021) demonstrated how branded pod models can scale specialty retail inside mass-market footprints.
• Apple’s stores remain a reference point for how a focused, service-led, experience-first strategy can create traffic and high per-square-foot productivity.

Nordstrom’s Jewel Box is not a mass-market play; it is a curated, premium counterpoint aimed at customers seeking premium products and memorable experiences. How consumers perceive price-value, especially in price-sensitive toy categories, will determine how much share FAO Schwarz captures versus other toy destinations.

Operational and executional challenges

Scaling experiential toy retail within department stores introduces several operational complexities:

Staffing and training

• FAO’s theatrical experiences require staff who can stage demonstrations, assist customization stations and manage safety concerns. Training and consistent service standards are essential to preserve brand theater and customer satisfaction.

Inventory and supply chain

• Toys are seasonal, trend-driven and SKU-heavy. Managing inventory to balance variety with turnover is difficult. Larger items present logistical challenges for in-store fulfillment, which Nordstrom mitigates by staging larger goods online. Coordination between FAO Schwarz’s supply channels and Nordstrom’s inventory systems will be critical to avoid stockouts and overstocks.

Space allocation and merchandising cadence

• Jewels Boxes occupy prime retail real estate. Their success depends on conversion and per-square-foot productivity. Nordstrom must optimize assortment, promotions and in-store programming to justify devoted space and opportunity cost.

Brand alignment and price positioning

• FAO Schwarz has upscale theatricality; Nordstrom must ensure price and merchandising align with customer expectations. Overpricing relative to alternatives could suppress conversion; underinvesting in theater could dilute FAO Schwarz’s brand equity.

Regulatory, safety and liability

• Interactive exhibits such as Dance-on Pianos and hands-on demos require maintenance and safety protocols. Liability insurance, maintenance schedules and staff oversight are non-trivial expenses.

Marketing and traffic generation

• Pilot Jewel Boxes need local marketing investments, brand events and partnerships to generate awareness. Social media-ready moments can amplify reach, but paid media and community outreach will likely be necessary to sustain traffic after the initial buzz.

Nordstrom’s omnichannel infrastructure and FAO Schwarz’s retail theater mitigate some of these risks. However, execution must be disciplined to translate novelty into sustained revenue.

Real-world precedents and lessons

Retail partnerships that combine a specialty brand’s theatricality with a broadline retailer’s footprint offer instructive comparisons.

Ulta-Target shop-in-shop

• Ulta’s partnership with Target created a scaled beauty destination inside a mass-market retailer. The success rested on brand fit, clear operational roles, shared loyalty integrations and careful merchandising. Ulta retained merchandising expertise while leveraging Target’s traffic.

FAO Schwarz at Rockefeller Center

• FAO Schwarz’s 2018 Rockefeller flagship reintroduced the brand to tourists and New Yorkers. Its survival and expansion into other markets show that theatrical toy retail can still resonate in flagship formats—with location and programming central to appeal.

Lego and experiential stores

• Lego’s investment in interactive retail and events showed the longevity of brand-driven, hands-on experiences. These stores emphasize product discovery, collector engagement and family programming—similar objectives to FAO Schwarz’s strategy.

These examples highlight consistent success factors: brand alignment, operational clarity, strong training, integrated loyalty or promotions, and creative programming that keeps the experience fresh beyond the initial launch.

What this means for toy brands and manufacturers

The Nordstrom–FAO Schwarz partnership opens distribution and brand-building opportunities for toy manufacturers, especially those aligned with FAO Schwarz’s curated, higher-end image. Key implications:

• Shelf placement and storytelling: Brands selected for Jewel Boxes and the Manhattan flagship gain access to theatrical displays and demonstration-driven selling, which can accelerate awareness and premium pricing.
• Exclusive launches: Brands that can deliver exclusives or customization opportunities stand to capture more attention and margin.
• Trade-offs for scale: Some manufacturers will find the curated FAO assortment attractive for brand equity; others that rely on mass distribution may hesitate if price positioning becomes skewed upscale.
• Product design and packaging: Experiences matter—brands that design for demonstrations, unboxing moments and social sharing align best with this format.

Manufacturers must also consider logistics: smaller, higher-margin runs for Jewel Boxes and exclusives require flexible production planning and quick replenishment cycles to support fast-moving theatrical assortments.

Metrics that will determine success

Nordstrom and FAO Schwarz will watch several measurable indicators to judge the program’s performance:

• Sales per square foot for the flagship and Jewel Boxes, compared to baseline categories and opportunity costs.
• Conversion rates and average order value (AOV) for customers who visit FAO spaces versus the broader store.
• Dwell time and cross-department lift metrics—does FAO-driven traffic translate to sales in children’s apparel, shoes, beauty or accessories?
• Repeat visitation and loyalty engagement—do families return outside the holiday season?
• Online sell-through rates and fulfillment performance for large items and exclusives.
• Social engagement and earned media—user-generated content can amplify program reach at low marginal cost.
• Inventory turns and markdown rates—especially important for a seasonal, trend-driven category.

If Jewel Boxes and the flagship generate strong net-new traffic, durable periods of high conversion and loyalty lift, Nordstrom is likely to expand the concept further. If the spaces underperform relative to rent and opportunity cost, Nordstrom may scale back to a highly curated online plus selected store approach.

Risks and strategic contingencies

Several risks could undermine the initiative:

• Seasonal volatility: Toys peak during the holidays; sustaining traffic in off-peak months requires compelling programming and year-round exclusives.
• Consumer price sensitivity: Higher price points and premium branding risk alienating price-conscious shoppers seeking everyday toy values.
• Executional inconsistency: Theater must be maintained; any drop in experiential quality may erode FAO Schwarz’s cachet and Nordstrom’s reputation for service.
• Cannibalization: The FAO offering could redirect spend from other in-store categories without adding net-new customers, diluting overall profitability per square foot.
• Macro-economic headwinds: Consumer spending on non-essential categories, including premium toys, tightens during economic slowdowns.

To mitigate these risks, Nordstrom can:

• Use data from the pilot stores to refine assortments and programming.
• Integrate loyalty incentives and cross-promotions to create multi-category baskets.
• Rotate exclusive product launches and community events to sustain interest.
• Lean into online fulfillment for larger items to preserve in-store space for high-impact demonstrations.

What to watch next

Several near-term indicators will show whether this partnership achieves its objectives:

• Early sales data from the Nordstrom 57th Street FAO Schwarz and the first Jewel Box openings (scheduled to begin in July) will reveal conversion and AOV trends.
• Attendance at in-store events and the effectiveness of FAO-Abulous and FAO Beauty customization programs in driving transactions and repeat visits.
• Customer feedback and social media engagement—are the theatrical moments translating into shareable experiences?
• Pricing and inventory health—are exclusives selling through, or is the assortment overstaying its welcome and requiring markdowns?
• Expansion decisions—if Nordstrom greenlights more Jewel Boxes beyond the initial eight, that will indicate confidence in scalability.

Investors, competitors and toy brands will watch these signals closely. Positive momentum could catalyze broader roll-outs and encourage other department stores to pursue similar branded partnerships.

Strategic takeaways for retailers and brands

The Nordstrom–FAO Schwarz collaboration offers practical lessons for retail executives and brand managers:

• Align formats to objectives: Concessions work when brand control and theater are essential; wholesale and pod models scale reach without full operational complexity.
• Treat theater as infrastructure: Staging experiences requires trained staff, maintenance schedules and programming calendars—not a one-off merchandising plan.
• Use exclusives strategically: Limited editions and customization serve both commerce and content. They can justify store visits and encourage social amplification.
• Build omnichannel bridges: Stocking larger items online while showcasing smaller, demonstrable items in-store balances logistics with discovery.
• Measure cross-category lift: Toys can be a gateway to other categories. Track whether experiential pods generate net-new customers or merely redistribute spend.

Brands should pursue distribution with retailers who offer experiential alignment, back-end capabilities and a clear plan for maintaining the quality of presentation.

The broader implications for experiential retail

Nordstrom’s FAO Schwarz move is part of a broader recalibration in physical retail: stores are less about commodity transactions and more about curated experiences that cannot be replicated online. When done well, experiential retail builds emotional ties, encourages longer visits and generates content that feeds digital channels. The partnership underscores several industry shifts:

• Hybrid commercial models are gaining favor. Retailers and brands now commonly mix concessions, wholesale, pop-ups and dedicated pods to match capital exposure with strategic value.
• Departments are morphing into destination neighborhoods. Nordstrom’s family-oriented cluster—FAO Schwarz plus Picnic on 57th—creates a distinct destination within a larger store.
• Experience becomes a brand amplifier. For FAO Schwarz, placing its theater inside Nordstrom expands brand exposure beyond a single flagship while preserving the dramatic elements that define it.
• Retail as a platform for discovery. Department stores with curated theater and a service emphasis can differentiate against pure-play e-commerce by offering tactile, demonstrative shopping that drives purchase confidence.

These trends create opportunities for specialty brands that can deliver staged, Instagrammable moments and for department stores that can convert theater into consistent revenue.

What success looks like—but also what would qualify as failure

Success indicators:

• Consistently high sales per square foot in flagged locations compared with base-case projections.
• Clear positive cross-category lift—families visiting for toys also purchasing children’s apparel, shoes and accessories.
• Repeat visitation driven by rotating programming and exclusive product drops.
• Low markdown rates and high margin retention on exclusives and customization services.
• Positive brand perception across customer segments, not just tourists.

Failure indicators:

• High marketing and operating costs that erode margin despite healthy top-line sales.
• Rapid declines in novelty after the initial launch, leading to excessive markdowning.
• Customer confusion or dissatisfaction if FAO Schwarz theater and Nordstrom service diverge in execution.
• Inventory management problems—stockouts at peak times or high safety-stock levels year-round that reduce returns on inventory capital.

Nordstrom’s strategic patience will be important. Even the best experiential concepts need time to integrate into local shopping habits. The company’s decision to pilot Jewel Boxes in carefully chosen stores rather than launch a broad national roll-out reflects a sensible risk management posture.

Final perspective: repositioning a department store with play as a growth lever

Nordstrom’s FAO Schwarz partnership is a layered, pragmatic attempt to reframe a category that historically drove holiday traffic into a year-round, brand-building asset. The collaboration leverages FAO Schwarz’s theatrical reputation to create destination retail, while Nordstrom’s omnichannel capacity and customer service ethos provide the infrastructure to scale thoughtfully.

For FAO Schwarz, the Nordstrom concession and Jewel Boxes widen distribution and reaffirm the brand’s relevance by exposing it to a different customer base within a respected specialty retailer. For Nordstrom, FAO Schwarz helps supercharge a previously modest category, strengthens gifting credibility and gives families a reason to visit stores beyond transactional necessity.

The coming months—Jewel Box rollouts starting in July and early sales snapshots from the 57th Street flagship—will decide whether this partnership becomes a blueprint for similar collaborations or a cautionary case about scaling theatrical retail inside department stores. Early signals will come from sales per square foot, cross-category lift, customer repeat rates and the ability to sustain programming and exclusives beyond launch season.

If Nordstrom converts novelty into routine behavior—families returning for birthday experiences, customizations and unique seasonal moments—the retailer will have added a durable, experiential dimension to its store ecosystem. If the effort fails to move the needle beyond tourist-inspired spikes, the program may revert to a seasonal, curated playbook. Either outcome will offer valuable lessons about the balance between theater and commerce in a sector where the tactile remains a powerful differentiator. The first phase of results should be instructive not just for Nordstrom and FAO Schwarz, but for any retailer considering a branded experiential partnership.

FAQ

Q: What exactly opened at Nordstrom 57th Street? A: A 5,000-square-foot FAO Schwarz flagship concession opened on Lower Level 2 of Nordstrom’s 57th Street flagship in Manhattan. FAO Schwarz owns, operates and merchandises that concession. Nordstrom separately opened a family-oriented food concept called Picnic on 57th.

Q: What are the Jewel Boxes? A: Jewel Boxes are 2,000-square-foot FAO Schwarz toy shops that Nordstrom will install in eight top stores across the U.S. These will feature branded activations, toy demonstrations, storytelling and curated assortments. Nordstrom will buy merchandise wholesale from FAO Schwarz to stock these Jewel Boxes.

Q: Which Nordstrom stores will get Jewel Boxes, and when? A: The initial eight locations are Aventura Mall (Miami); Bellevue Square (Bellevue, Wash.); Brea Mall (Brea, Calif.); Garden State Plaza (Paramus, N.J.); NorthPark (Dallas); Oak Brook Mall (Oak Brook, Ill.); South Coast Plaza (Costa Mesa, Calif.); and Fashion Valley (San Diego). They are scheduled to begin opening in July.

Q: How will product assortment be managed between FAO Schwarz and Nordstrom? A: FAO Schwarz will merchandise and operate the 57th Street concession. For the Jewel Boxes and nordstrom.com, Nordstrom will buy FAO Schwarz merchandise wholesale and integrate it into its stores and online platform. Other Nordstrom stores will carry a “highly curated” toy assortment tailored to local demand and space.

Q: Will FAO Schwarz merchandise be available online? A: Yes. FAO Schwarz’s assortment will be available on nordstrom.com as part of Nordstrom’s expanded toy offering.

Q: Why is Nordstrom investing in toys now? A: Nordstrom expanded its toy assortment in 2025 after seeing strong customer demand and gifting performance. The FAO Schwarz partnership is an effort to make toys a year-round, experiential category that attracts families, strengthens gifting credentials and drives in-store traffic.

Q: How does the arrangement affect FAO Schwarz’s existing stores? A: The partnership gives FAO Schwarz a second New York flagship presence within a high-profile department store and extends the brand’s retail reach through Jewel Boxes and nordstrom.com. FAO Schwarz retains brand control over the Manhattan flagship while gaining broader distribution through Nordstrom’s wholesale purchases.

Q: Could this partnership threaten other toy retailers like Toys “R” Us or Macy’s? A: It raises competition in upscale, theatrical toy retail and strengthens Nordstrom’s positioning for holiday gifting. Macy’s remains a major holiday destination, but Nordstrom’s FAO Schwarz collaboration repositions Nordstrom as a contender for family and gift shoppers seeking premium, experiential toy shopping.

Q: What are the main risks for this initiative? A: Key risks include seasonal volatility, executional consistency in delivering theater and service, inventory management for a SKU-heavy category, pricing alignment with customer expectations, and return-on-space considerations if Jewel Boxes underperform relative to other uses of retail real estate.

Q: How will Nordstrom measure success? A: Nordstrom will likely evaluate sales per square foot, conversion rates, average order value, cross-category lift, repeat visitation, online sell-through for FAO products, social engagement and inventory turns.

Q: Can the concept scale nationally? A: The Jewel Box pilot is a measured approach to test scale. If KPIs such as sustained sales, customer repeat rates and cross-departmental lift meet expectations, Nordstrom can expand the concept into more stores. The dual model—concession plus wholesale—gives flexibility for broader scaling without full concession commitments everywhere.

Q: How will this change the in-store experience at Nordstrom? A: It creates a stronger family- and gift-oriented destination within select Nordstrom stores, blending theatrical toy moments with curated shopping and food offerings like Picnic on 57th. The initiative aims to lengthen visits and create shareable experiences that boost Nordstrom’s relevance with younger shoppers and families.