In-Depth: Reviving FAO Schwarz and The Sharper Image

Experience, experience, experience. For toy retailer FAO Schwarz and consumer tech retailer The Sharper Image, it’s not just a trending topic but a long-employed approach to customer engagement. Moreover, it’s experience that helped to cement each brand’s position as titans within their respective industries.

“We were experiential before it was cool to be experiential,” says David Conn, chief executive officer, ThreeSixty Brands.

Having faced a series of corporate restructurings, brick-and-mortar closures, migrations online and more, each company has managed to find its unique place in the current retail climate. ThreeSixty Group, which owns FAO Schwarz and holds the licensing rights for The Sharper Image brand, has outlined plans to engage customers old and new.

FAO Schwarz was founded in 1862 as “Toy Bazaar,” and quickly established itself as a retail case study, both in terms of size and reach, in America’s largest cities. Capitalizing on its locations and inventory, FAO Schwarz became a shopping destination rather than simply a quick stop. Despite undergoing a formative name change, the Bazaar concept lived on as the store engaged in product exhibitions, one of the first mail-order catalogs, in-store activations, and pop-culture at large, most notably in the movie Big. Also notably, Nintendo first premiered its Nintendo Entertainment System at FAO Schwarz in 1985.

“When you mention FAO Schwarz, people smile and they have these emotional stories about when you walked into that store on Fifth Avenue [in New York City],” says Conn. “It was transporting, a sense of wonderment, product demonstrations and theater. That's what we want to bring back. That's what's missing in retail today.”

Right Start purchased the toy retailer in 2002, filing for bankruptcy twice and citing “increased competition from discounters” in a 2003 interview with the New York Times. Subsequently, the company shuttered its flagship and faced a series openings, re-openings and ownership changes until being purchased by ThreeSixty Group in 2017. Through the changes, FAO Schwarz remained a staple for tourists and parents, featuring over-the-top displays and actors who would perform as characters, primarily around the holidays.

In 2015, FAO Schwarz announced that it would be closing its New York flagship and dismantling several of its U.S. brick-and-mortar operations. It re-launched in 2017 with shop-in-shops at more than 5,000 retailers nationwide and plans to open a 20,000 square-foot flagship in New York’s Rockefeller Plaza.

“Last year we were in a department store doors and shopping shops, places like Macy’s, Bloomingdale’s and Nordstrom,” continues Conn. “We pitched to them and said, ‘If you're interested in just buying product and putting it on the shelf, that's not interesting to us.’ We need shopping shops, we need window displays, we need to do product demonstrations. We're increasing our business with all of our accounts from last year.”

In February, the company announced plans to launch in mainland China through a brand collaboration with Kidsland. There, the brand is looking to itself as the country’s go-to high-end toy retailer with flagships in Beijing and Shanghai. Kidsland will also establish 30 small specialty stores and shop-in-shops over the next five years. Domestically, FAO Schwarz has paired with the Hudson Group for FAO Schweetz candy at airport shops and standalone stores.

The company’s next challenge? Marketing itself to young children who have more buying power than any generation before them, yet aren’t familiar with the brand.

“[Advertising] is going to be social media-driven, YouTube-driven, influencer-driven,” says Conn. “We think a lot of kids are going to go through the doors of that store, find their way into our website later on and have a very good feeling about that.”

Simultaneously, ThreeSixty is working to revitalize The Sharper Image, the home electronics and high-tech lifestyle brand known for its cutting-edge gadgets, gifts and iconic catalog.

Currently operating online and through third-party sellers, The Sharper Image was founded in 1977 as a jogging watch catalog business. Finding success in its mailer, The Sharper image grew to 187 retail locations across 38 states that carried a variety of high-tech goods, including massage chairs and purifiers to futuristic gadgets.

The company filed for bankruptcy in 2008 and closed all of its retail locations by the end of that year. In 2009, Camelot Venture Group acquired the rights to operate a new Sharper Image catalog and website, SharperImage.com. In 2016, ThreeSixty Group purchased the Sharper Image brand licensing rights.

“Since we bought it, we’ve made an effort to elevate the product,” says Conn. “What's unique about Sharper Image is that it’s a brand that can cover a lot of different categories of merchandise and there's always that one thing that has an unexpected twist to it.”

Recently, the brand secured a slate of new licensees across numerous categories. First, Conair Corporation has signed on to manufacture a line of Sharper Image-branded haircare and beauty products for men and women that will include shavers, razors, trimmers, nail care, curling irons, curling wands, flat irons, hot air brushes, specialty stylers and more; Allstar Products Group will create Sharper Image-branded electronics, wellness products and home goods to be rolled out through infomercials; Vornado Air will develop a line of Sharper Image-branded home heaters and fans; and Mystic Apparel has partnered with a line of smart pet accessories that will include bedding, toys, apparel, feeding, grooming, storage, waste disposal and leashes; with Aerus teaming for a line of branded HEPA air purifiers.

“A lot of people think Sharper Image is a very masculine brand,” adds Conn. “We actually have a higher percentage of purchases from females than males. It’s big gift giving brand and sometimes that might play into it. We were working very hard to develop product from our female customer as well on Conair’s partnerships can be perfect. The new lines will be available at retail in 2019.”

The company plans to continue its expansion with additional licensees and new opportunities at retail.

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