Ripple Effects of Chapter 11 Filing By Toys ‘R Us Begin to Spread to Manufacturers— Declining Profits Now Reported By Hasbro and Mattel


Where are all of our customers? As the number of independent toy retailers and their “brick-n-mortar” stores continues to decline, toy manufacturer claims that their own lost profits could be made up with rising internet or “online” sales has now proven to be questionable—even unlikely. Should toy manufacturers such as Hasbro consider opening their own retail store outlets to compensate?

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


Will Matty need a handout? Looks like this company mascot is extending his hand for…what? Will his business soon seek court protection, ala Toys R Us?

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.

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4 thoughts on “Ripple Effects of Chapter 11 Filing By Toys ‘R Us Begin to Spread to Manufacturers— Declining Profits Now Reported By Hasbro and Mattel

  1. Ed Kozak says:

    I can’t say that I totally agree that Hasbro and Mattel are both suffering solely due to TRU, they have been slowly declining for years. Kids don’t want toys like we did as kids and I wouldn’t buy a 4-inch figure for son for $15 with poor quality, the figures today fall apart and don’t stand up to being played with. Hasbro and Mattel, need to either go back to the basics and make play-worthy toys for a reasonable selling price or shift to a more electronics-based industry.

    • kneonknight says:

      I agree, Mr. Kozak, while TRU might have been one of the major retailers carrying Mattel and Hasbro toys and games, the companies themselves are to blame for rehashing the same lines of licensed products without anything new or innovative. On my last trip to the local TRU, there were tons of Star Wars and Disney themed items, with very little else representing the companies in question. In addition, these toys were based on movies that are at least 2 to 5 years old, and most kids simply lost interest and moved on when nothing new was added to these lines.

      In Habro’s case, I think that their poor showing for G.I. Joe’s 50th Anniversary left a bad taste in many collectors’ mouths that was further embittered by the pathetic mannequins labeled as G.I. Joe that had a pitiful 5 points(!) of articulation, and was tied to a movie franchise that didn’t do as well at the box office as was hoped. This definitely hurt sales, especially after Hasbro essentially said “EFF YOU” to American collectors and then launched a rather nice line honoring Action Man in Great Britain.

      Now, while both companies do have a pretty fair line of other toys, little of those are seen on TV or in printed ads, and those that are seem to be mostly represented by gimmicky electronic doodads that are very poor at stimulating imaginative or creative play – in essence, you insert batteries, throw a switch and (for want of a better term) the toy “plays with itself.”

      Finally, a good share of the blame must be shared by modern parents. Rather than spend some real quality time with their children, it is common to simply plop them in front of the game console or computer to keep them occupied. Don’t get me wrong, video and online computer games can be fun and exciting, but they don’t really allow for a lot of improvisation. There is a script that must be followed to succeed, and while many of these games offer different method to reach the main goal, little actual input is allowed for the player other than choosing a path that will lead you to the preset conclusion. If the game doesn’t allow for flying bulldozers or giant, killer house cats, then you will never be allowed to fly a bulldozer to Mars or overcome the menace of the Fluffy Kitty of Doom, and that is saddening.

      Addendum – I must apologize to our host, Mr. Otnes for going off on yet another long-winded rant. No matter how hard I try to be brief and succinct, I always seem to produce a novel length post that requires a comfortable chair and tasty beverage for the poor reader to be able to wade through it all.

      • HA. No need to apologize to me, sir. Your so-called “rants” are very eloquent, well thought out commentaries on the topic(s) at hand. We need MORE of your superb input, not less. —Mark 🙂

        • kneonknight says:

          You flatter me, Sir. I feel privileged to share this forum with such August personages as Mr. Wayne Faucher and yourself. Happy Thanksgiving to you and to all the rest of the Joe community.

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