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Toys 'R Us Rolls Out FAO Pop-Up Stores, Exclusive Items

Last Christmas, retailers were tussling in the toy aisle, as discounters such as Target and Wal-Mart fought to win holiday sales by touting low prices and "toys under $10."

FAO pop-up store
Source: Toys R Us
FAO pop-up store

Fast forward to this year. Toys 'R Us is taking an interesting approach for at least one slice of its business that boils down to this: you can't compete on price if you don't have the item.

Sure, the retailer will have plenty of the hot must-have holiday toys, but it is also expanding the number of exclusive toys it will be selling, and it finally began to expand the reach of the FAO Schwarz business, so some folks won't have to travel to New York to dance on the big piano keyboard.

The iconic FAO Schwarz brand has long been known for its unique, high-end toys—not to mention the scene in "Big,"’—and that is expected to continue.

But instead of solely residing at its flagship on Manhattan's 5th Avenue, online and within a section of Toys 'R Us stores, FAO Schwarz will debut at least 10 pop-up stores.

Many of the pop-ups will be added to upscale malls around the country including the South Coast Plaza in Costa Mesa, Calif., the Mall at Chestnut Hill in Chestnut Hill, Mass., and the Old Orchard mall in Skokie, Ill.

Some of the locations are ones that may have housed a FOA Shwarz store prior to Toys 'R Us' ownership of the luxury toy brand.

In one interesting iteration, there will be a Toys 'R Us and FAO Schwarz store side-by-side in the Paramus Park Mall in Paramus, NJ.

The company is starting to open these stores now, with the intention of closing them in mid-January. However, just as Toys 'R Us has done for its pop-up toy stores, it wouldn't be surprising if successful stores are kept open, if the sales and the price of the rent are right.

But FAO is only one way Toys 'R Us is attempting pitch its exclusive items. The retailer is expanding its private-label business with toys under the Imaginarium brand, and has worked with manufacturers such as , Fisher-Price and Jakks Pacific to develop toys for its stores.

The retailer is also working to bring brands such as Calico Critters, previously available only at select small specialty toy stores, to the national stage, while other brands such as Tomica, a Japanese brand, will be brought to the U.S. for the first time.

And—in what may become a holiday tradition—it will sell a Christmas-style train set under Fisher-Price's Geotrax brand.

What's notable is some of these items will tap into hot licensing properties such as the Disney princesses and Phineas and Ferb, Pixar's Toy Story, and television shows like CSI and Glee.

Questions? Comments? Email us at consumernation@cnbc.com

Retail