Associated Press: Toys R Us. Inc. announced early Thursday that it had bought troubled high-end retailer FAO Schwarz, which has struggled for years through bankruptcies amid tough competition from discount stores.

"We will work tirelessly to preserve the distinctiveness and integrity of the FAO Schwarz stores and brand as we grow the business and, indeed, take the brand to even greater heights," Jerry Storch, CEO and chairman of Toys R Us, said in a news release.

Toys R Us will operate FAO Schwarz's flagship store in New York City and a second store at Caesars Palace in Las Vegas. FAO Schwarz's Web site and catalog will continue to use the company's name.

The company declined to release financial details of the agreement.

FAO Schwarz was established in 1862 and immortalized in the 1988 Tom Hanks movie "Big." It's best known for its upscale selection of toys but also began to offer its own branded $20-and-under toys during the 2008 holiday season.

It has faced financial difficulty in the past. The company filed for bankruptcy protection twice in 2003, first in January after a weak 2002 holiday season. It was purchased by D.E. Shaw group in 2004.

Toys R Us operates more than 1,500 stores worldwide, including 847 in the United States.

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