The first 75 full-sized FAO Schwarz stores will open in Macy's in the fall, along with another 200 smaller toy shops, The Chicago Tribune said. The newspaper said the first trial run of the Macy's-FAO Schwarz combination was conducted at the department store's State Street location in Chicago.

"This is an outstanding partnership that will bring toys back to Macy's in an exciting and unique way," Terry Lundgren, president and CEO of Macy's, told the Tribune.

FAO Schwarz also will market its private-label collections its new Macy's locations.