To most toy fans and collectors, this latest news will not come as much of a surprise. In fact, current developments regarding the world’s ongoing toy retailing saga may seem all too predictable, but here we go nonetheless: It turns out, having fewer retail stores for customers to visit and browse for products (like toys) can actually be bad for business. <Wow. Who’d a thunk it?> In fact, following closely on the heels of the recent story of Toys R Us’ (TRU) filing for Chapter 11 bankruptcy protection, we now also learn that Hasbro and Mattel (both) are beginning to feel their own negative economic ripple effects—and that they believe their troubles can be laid squarely at the doorstep of TRU’s earlier woes. According to the AP:
“Mattel, the maker of Barbie dolls and Hot Wheels cars, reported disappointing third-quarter results late Thursday and said it was hurt by Toys R Us’ Chapter 11 bankruptcy filing last month. Earlier this week, Hasbro, the maker of My Little Pony and Monopoly, also blamed weak results on the Toys R Us bankruptcy filing.
Mattel, whose revenue in North America fell 22 percent in the three months ending Sept. 30, said that about half of that decline was due to the Toys R Us bankruptcy. Globally, most of its brands saw sales declines. Barbie sales fell 7 percent and Hot Wheels fell 6 percent. Sales of its American Girl brand, whose 18-inch dolls typically cost more than $100, fell 30 percent.” —AP
Whoa. 30 percent? That’s quite a financial nosedive. And if ever a particular toy brand needed a store’s support (i.e. an actual, physical PLACE to go to) so as to be able to SEE and HANDLE their extensive and upscale line), it’s pricey American Girl. Anyway…
Bottom Line: If TRU’s Chapter 11 reorganization and debt payoff difficulties continue, it seems likely that additional store closings and employee layoffs industry-wide could also continue. That would result in even fewer “brick-n-mortar” toy stores, less actual shelf space for toys, and then ultimately, fewer toys overall for fans and collectors to buy and enjoy. Ouch! That’s where WE feel “the pinch.” We’re not too worried about the financial stability of either Hasbro or Mattel (they’re doing just fine, thank you), but this situation is fluid and developing. Stay tuned for further intel. Read the AP story HERE.