What New York City attraction brings in more tourists each year than the Empire State Building or the Statue of Liberty? Why, it's FAO Schwarz, the famous toy store, of course.

It's not hard to understand the draw. The flagship emporium on Fifth Avenue in Manhattan -- the best known of the national chain's 38 similarly decorated stores -- is a fantasyland of whirling gizmos, blinking lights, talking bears, and singing clocks. The mazelike layout of the Fifth Avenue shop spans two levels and is filled from floor to ceiling with toys, toys, and more toys -- gargantuan stuffed animals, fancy dolls, elaborate board games, and thousands of unique and trendsetting kid pleasers -- all of which can be fiddled with by hopeful little hands and more than a few big hands as well.

The wizard behind the curtains orchestrating all this is HBS's own John Eyler. As FAO Schwarz's president and CEO, Eyler says he has found "the perfect job." "I'm basically a big kid," explains the jovial executive as he demonstrates the latest push-me-pull-you gadgets that fill his office located several stories above the Fifth Avenue landmark.

But it's more than the opportunity to let his childlike imagination roam free that makes the job so appealing to Eyler -- it's also the chance to put to the sternest test yet his 25 years of management experience with retailers such as Federated Department Stores, Hartmarx, and the May Company. When Eyler took over the helm of the privately held FAO Schwarz in 1992, the company that specialized in make-believe was facing some very harsh realities. It had just come off the biggest money-losing year in its then­130-year history -- the result, says Eyler, of a series of owners who had lacked the capital necessary to keep the operation fresh and competitive.

With the support of the Dutch retail group KBB, which bought the chain in 1990, however, Eyler immediately began implementing what he calls a "back to the future" strategy. "It was a matter of looking at what had made FAO Schwarz great in the past -- its capacity to create 'magic' for people -- and restoring it to its former glory," he says. Eyler initiated a complete renovation of store interiors, added new attractions, and revamped the merchandise so that more than 70 percent of it now features either exclusive or hard-to-find items.

Down on the Fifth Avenue shop floor, Eyler darts about with the zeal of a boy showing off his bedroom. "Our stores are fun again," he says, pointing to an elevator decked out to look like a movable robot and whimsically dubbed "Go-2-Floor-2." The improvements that he and his relatively small staff of fifty have made in store design and ambiance have been reflected in the bottom line as well. "Last year was our biggest money-making year ever," he smiles.

And under Eyler's visionary leadership, the future of FAO Schwarz looks even better. "Next year we'll be building new stores that will be the epitome of what we think an interactive store can be," he says. In addition, the company recently launched a new chain called "FAO Schweetz," which Eyler describes as "the world's first fully animated candy store." By 1999, he says, the company will begin expanding to key capitals around the world.

It's a tall order. But no doubt John Eyler will continue to make it all look like child's play.

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