New York (AP) -- FAO Schwarz will open toy stores in close to 700 Macy's department stores over the next two years.

The companies said friday that 146 year-old FAO Schwarz will sell its own private label collection at Macy's stores.

Cincinnati-based Macy's says 685 toy stores will open in its department stores over the next two years.

The companies also say that about 75 full-size FAO Toy Stores will open across the country in the fall, along with about 200 smaller shops that will be up to 300 square feet.

FAO Schwarz continues to independently own and operate its own stores, including the Fifth Avenue flagship store in New York.

(Copyright 2008 by The Associated Press. All rights reserved.)