NEW YORK, Dec. 27 (UPI) -- New York City's flagship toy store, F.A.O. Schwarz, and a sister store in Las Vegas are being sold in a deal that will preserve the legendary name.

In a deal announced Friday, D.E. Shaw Laminar Portfolios purchased the bankrupt toy store company, the New York Times (NYSE:NYT) reported.

A New York investment firm that also acquired the company's Internet and catalog businesses, Shaw Laminar plans to remodel and reopen the two stores next summer.

FAO said in a statement that the deal required the approval of a bankruptcy judge. A source told the Times that the remaining 12 F.A.O. Schwarz stores as well as its 89 Zany Brainy stores would close.

The business was founded by Frederick August Otto Schwarz in Baltimore 142 years ago. He moved it to New York in 1880, and in 1931, in the midst of the Great Depression, he set up shop at the first of several Fifth Avenue sites.

The flagship store on New York's Fifth Avenue has been an emporium of dreams for children of all ages, bursting with collector's dolls, richly carved rocking horses and finely detailed model trains that chugged and whistled through little villages and mountain tunnels -- all at suitably elegant prices.