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September 2, 2014

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FAO Schwarz lets Forum Shops lease expire, quietly leaves Las Vegas

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Sam Morris

The FAO Schwarz at the Forum Shops at Caesars closed Jan. 23.

Beyond the Sun

Map of Forum Shops

Forum Shops

3500 Las Vegas Blvd. South, Las Vegas

For rent: a three-level storefront at one of the most successful shopping malls in the country, previously filled with toys. The previous tenant’s 48-foot-tall equine will be removed.

That’s right, the iconic FAO Schwarz on the Strip quietly closed Jan. 23, and the next to go will be the wooden Trojan horse that has entertained children, tourists and locals at the store’s entrance since 1997.

The toy store let its lease at the Forum Shops at Caesars expire at the end of January. So, Maureen Crampton, marketing director of the Forum Shops, said, “That space will be demolished (for renovation). Unfortunately, the horse will not remain.”

Mall officials are hopeful that they can lease the space to a national retailer that wants to establish a flagship store or its largest store nationwide in one of the country’s premier shopping destinations.

“That space is considered to be an ideal location for a small group of select retailers,” Crampton said of FAO’s old location in the wing of the mall tourists walk through to reach the popular Niketown store, Cheesecake Factory restaurant and Atlantis aquarium and show.

Las Vegas retail industry observer Scot Marker, a senior vice president at brokerage Colliers International, said the Forum Shops maintains its status as one of the nation’s premier high-end malls.

And in the short term that may make leasing the Forum Shops space challenging, given the national downturn in spending on luxury goods.

“The Forum Shops set the bar — it set it high,” Marker said. “It has the only Niketown. It’s prestigious.

“I don’t know of many high-end retailers out there rolling out stores,” Marker said. “There’s probably only a handful of tenants that could take that space.”

Described by owner Simon Property Group of Indianapolis as “part Beverly Hills, part Rome’s Via Condotti and part Madison Avenue,” the Forum Shops has about 160 stores and has boasted it is visited typically by 50,000 people a day.

One thing that probably won’t work for the 635,000-square-foot mall, Marker said, is another toy store.

For years, the relationship between FAO Schwarz and the similarly high-end Forum Shops seemed to work.

Forum Shops, long known as the nation’s highest-grossing mall with annual sales last reported at $1,400 per square foot, was a must-see spot for tourists staying at the adjacent Caesars Palace and other Strip resorts such as the neighboring Mirage.

And within Forum Shops, the three-story FAO Schwarz became a key attraction after opening in 1997 in 55,000 square feet.

But then came the recession.

Visitation to Las Vegas tumbled and locals slashed their spending. Although store-specific numbers haven’t been released, FAO Schwarz at the Forum Shops likely endured the economic pain like the rest of the city.

In the end, FAO Schwarz owner Toys R Us chose to close the store after the 2009 holiday shopping season. The lease expired at the end of January and “after much thoughtful consideration and a thorough business evaluation, we decided not to extend the agreement,” Toys R Us spokeswoman Jennifer Albano said Monday.

About 60 employees were affected by the closure and, where possible, were offered work at Toys R Us and Babies R Us stores in the Las Vegas area, she said.

FAO Schwarz has no plans to open elsewhere in Las Vegas, and remains focused on the FAO Schwarz brand with its flagship New York City store and its Web site.

Steve Green covers business and gaming for the Las Vegas Sun and is the editor of sister publication In Business Las Vegas.

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