Big Apple fixture FAO Schwarz, once besieged by financial troubles, is back -- and starting today, its magic is available to kids all across the U.S., thanks to Toys 'R' Us.

The New York Times reports that the toy megachain, which purchased FAO Schwarz earlier this year, is launching Schwarz-branded boutiques within 600 of its stores. The online boutique launches today.

The selection consists of high-end items in classic categories -- collectibles, stuffed dolls and dress-up are all among the categories. So how can Schwarz's somewhat retro -- and pricey -- wares compete in a market that often revolves around the latest Wii game or miniature iPod?

One word: grandparents.

No, seriously. Grandparents, the official sponsors of rocking horses, model cars and American Girl dolls (the historical ones, mind you!) are the last sales stronghold for timeless toys. They appreciate the Schwarz brand, love helping their grandkids build collections and believe that toddlers don't need their own mp3 players (they're onto something there).

So note to Toys 'R' Us: push FAO Schwarz to the senior crowd. They get the magic, and they have the means -- after all, if there's one type of spending the recession can't puncture, it's the kind grandparents do to spoil their grandchildren.

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