Out of a great many fortunes made by immigrants who came to America in the 19th century, this one stood out. It was made … in toys!

In 1856, 20-year-old Frederick August Otto Schwarz came from Germany to America to join his brothers working at a stationery and fancy goods store in Baltimore. It so happened that European fancy-goods suppliers sometimes packed handmade toys along with the other selling items. Following his natural salesman instinct, young Frederick came up with a brilliant idea – he displayed the toys in the shop window. The vision attracted many viewers and buyers, and the toys soon became the best-selling items. In 1862, the brothers opened their own store specifically dedicated to selling toys. There was no toy manufacturing in the US, and the Schwarz brothers, who sold high-quality handmade toys imported from Europe, dominated the business.

Soon after, Frederick August Otto Schwarz took his growing enterprise to the bustling New York City. Opening one store after another, from lower Broadway to more prestigious uptown locations, he ensured its success by selecting sites close to the buying public. However, as toys became a lucrative business, other players soon entered the field. In 1875 Macy’s – a retail giant – opened a toy department, creating serious competition for FAO Schwarz.

The competition presented new challenges and required new ideas. FAO Schwarz came up with the following: during the holiday season 1876, he enlisted none other than the most famous gift giver in history – Santa Claus – to meet with children before Christmas. Needless to say that the meeting location was his own FAO Schwarz toy store! The event attracted thousands of excited children accompanied by equally excited parents to line up in a long queue in front of the store in order to meet the big man himself and personally ask for a gift. Erroneously, the credit for a store Santa went to Macy’s that merely copied the “store Santa” idea and invited their Santa to greet children a year after FAO Schwarz did it. The movie “Miracle on the 34th street” depicted kids sitting upon Santa’s knee in Macy’s, forever connecting store Santa with Macy’s in the collective public imagination. Soon after, both stores introduced the idea that became as iconic as the Rockefeller Center Christmas Tree – elaborately decorated Xmas window displays. In all fairness, Macy’s beat FAO Schwarz to the punch with this idea by a year.

By 1876 FAO Schwarz became a household name, and kids all over the country, not just New York, wanted to buy unique FAO Schwarz toys. It was made possible through a newly created catalog of the store’s offerings. Now one didn’t have to live in New York to pick a toy but could peruse a colorful catalog with pictures, prices, and descriptions. In addition to that, kids could call the store and talk to Mr. or Mrs. Santa on the phone, convincing either of them that their good behavior warranted one of those fabulous, albeit expensive, FAO Schwarz toys.

After Frederick August Otto Schwarz died in 1911, the store stayed in the family, but not for long. It was sold and changed hands several times, staying successful for a while despite growing competition. Famously, FAO Schwarz reinvented itself from a mere retail store to a fairy tale toy experience in its famous location across from the Plaza. Live toy soldiers greeted the kids in front of the store; the children entered the world of oversized stuffed toys, could ride in miniature models of real cars or hop around a giant piano keyboard. The keyboard even made its way into the movies: Tom Hanks playing the giant piano keyboard by jumping on it in “Big” created quite a promotion for the store, making it even more desirable. Visiting FAO Schwarz on 5th Avenue during Christmas became one of the most beloved New York family traditions.

Despite this, FAO Schwarz eventually fell victim to competition with cheaper toy stores and online alternatives. To the great disappointment of many New Yorkers who made the yearly Christmas pilgrimage to the FAO Schwarz, the iconic Fifth Avenue location closed down for good in 2015.

But it was not to be the end of the story. . . Delighting the public, FAO Schwarz returned in 2018, opening a new store at the Rockefeller Center. Surviving into the 21st century, it’s a living, breathing monument to the imagination and business savvy of Frederick August Otto Schwarz, aka FAO Schwarz – a name that became synonymous with the magical world of toys he created a long time ago.