Category Archives: In the News

It’s Getting REAL—Mattel Lays Off Nearly One-Fourth of Its Total Workforce (2,200 Employees) As Toy Sales Continue Plummeting Worldwide—Mattel Factories Too, Will Soon Be Up for Sale

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Will Matty Mattel ask for a government handout? Maybe. It looks like the giant toy company’s mascot is extending his hand, pleading for financial assistance in a “time of need.” If sales of its products continue to drop, will Mattel’s leadership seek bankruptcy protection in court—ala Toys R Us? Toy fans around the world are wringing their hands!

We’ve been talking about the “slump” toymakers Mattel (and Hasbro) have been going through for a couple of years, but the downward economic effects of that trend are now about to be be felt on a truly PERSONAL level—by over TWO THOUSAND of Mattel’s employees. Mass layoffs loom. Factories too, are slated for imminent sales and closure. According to VOA News

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“Mattel, home of Barbie dolls and Hot Wheels, is cutting 2,200 jobs in order to save money after the closing of U.S. toy retail giant Toys R Us. The toymaker said the cuts amount to 22 percent of its nonmanufacturing employees worldwide. Mattel has about 28,000 employees. It also plans to sell factories in Mexico as part of a $650 million cost-saving plan.

Mattel reported a loss of $240.9 million in the second quarter, bigger than the $56.1 million loss in the same period a year ago. Revenues fell nearly 14 percent to $840.7 million, below the $863.1 million analysts had predicted. The toymaker has lagged behind its competitors in digital media, analysts say, and is trying to catch up with other brands that have spawned apps, movies and TV shows. 

Mattel CEO, Ynon Kreiz, said the company is working closely with other retailers and looking for more ways to sell its toys online.

Bottom Line: Mattel better get its act together. Sales are down. Factories are closing. People are losing their jobs. What else can go wrong over at the “Big M?” Stay tuned to The Joe Report!

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Clint Walker, Television & Film Star, Dead at 90

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“The Big Man”— Actor Clint Walker as he appeared in The Dirty Dozen (1967) (Photo: MGM)

At Ease, Private Posey— For fans of GIjOEs, vintage ’50s-’60s TV cowboys, and the WWII action movie genre, the recent announcement of the death of Hollywood’s “Big Man,” actor Clint Walker, was truly sad news. According to his obituary in yesterday’s New York Times (edited for length):malecomment

“Clint Walker died on Monday in Grass Valley, CA. He was 90. His death, at a hospital, was confirmed by his daughter, Valerie Walker, who said the cause was congestive heart failure. Mr. Walker appeared in the ‘The Dirty Dozen’ and other movies, but he was best known for ‘Cheyenne,’ seen on ABC from 1955 to 1963.

‘Cheyenne’ was among the first television series produced by Warner Bros., and it had the lavish look of a big-screen movie. As shooting of the show’s first season began, Mr. Walker confessed to the crew that he did not have a great deal of experience on horseback. He later recalled the response: ‘You’ll either be a good rider, or a dead one.’ ‘There were a few times I wondered which one it was going to be,’ he said.

Many episodes of ‘Cheyenne’ called for Walker to be shirtless, revealing a bodybuilder’s 48-inch chest and a 32-inch waist in onscreen moments that, while maybe not essential to the plot, helped make the handsome, blue-eyed Mr. Walker a star. At 6 feet 6 inches, he was tall not only in the saddle; one reporter joked that ‘he has snow on his shoulders six months of the year.’ 

His size forced him to restrict his movements to stay within camera range, which could be a challenge during onscreen fistfights. But he pressed for more of those. ‘I feel action is what I owe the public,’ he once told an interviewer. ‘When I see a hero yak-yak-yakkin’ I lose all interest.’

He was appearing on ‘Cheyenne’ when he began making films, including ‘Fort Dobbs’ (1958), with Virginia Mayo. Howard Thompson, reviewing that movie for The New York Times, called him ‘about the biggest, finest-looking western hero ever to sag a horse, with a pair of shoulders rivaling King Kong’s.’

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In ‘The Dirty Dozen,’ released in 1967, he played the meek Samson Posey alongside a crew of hardened military convicts — played by Jim Brown, Charles Bronson, Donald Sutherland and others — who were recruited for an assassination mission behind German lines during World War II. His last film was Joe Dante’s ‘Small Soldiers’ (1998), about high-tech toy soldiers that go on a rampage, in which he had a voice role along with some of his ‘Dirty Dozen’ co-stars. 

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Don’t Push Me!— Walker’s tense face-off with tough-guy Lee Marvin in this scene from The Dirty Dozen was one of the most memorable moments in the film. As Marvin continued to push and taunt the gentle giant, Clint’s mounting rage was palpable. He had a knife. Marvin was unarmed. What would happen next? Audiences were transfixed. This was EXCITING STUFF! (Photo: MGM)

Mr. Walker came close to dying in a freak accident on a ski trip in 1973 when he stumbled and a ski pole pierced his heart. He survived and recovered quickly. He worked as a port security guard and a nightclub bouncer, and then as a deputy sheriff providing security at the Sands Hotel in Las Vegas, NV. It was there that the actor Van Johnson suggested that he explore acting. Mr. Walker would later recall thinking: ‘I’m not going to get that far carrying a gun and a badge. It doesn’t pay that well. If you make movies, you make some pretty good money — plus, the bullets aren’t real!'”

Bottom Line: Rest in Peace, Mr. Walker. Happy Trails, Cheyenne. We will miss you!

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Billionaire Brainstorm—or Boondoggle? MGA’s Issac Larian Enters Formal Offer to Purchase U.S. and Canadian Toys ‘R’ Us Stores and Remake Them Into a “Mini Disneyland in Every Neighborhood”

Billionaire Hopes to Preserve “Toys ‘R’ Us Experience” for His Grandson’s Generation

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Isaac Larian— MGA Entertainment mogel and owner of the “Bratz” line of dolls (Photo: Mediatly)

In a bizarre twist to the ongoing Toys ‘R’ Us bankruptcy saga, billionaire Isaac Larian of MGA Entertainment has offered to purchase over 280 of the 735 Toys ‘R’ Us locations currently facing imminent and permanent closure for a whopping $887 million. Why, you might ask, would ANYONE want to spend all that money on what appears to be a dying “brick-n-mortar” business model showing NO hope of surviving in today’s digital “get it now” Amazonian shopping age? For the latest on this unexpected and constantly evolving story, we refer you to a story posted yesterday over on the CNN website (HERE) which reveals the following surprising intel:

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“Isaac Larian said Friday that he’s entered a formal offer of $675 million to buy many of the Toys “R” Us stores in the United States, along with an additional $215 million for Toys “R” Us stores in Canada. Larian is looking to buy more than 200 of the remaining 735 locations in the US, and almost all of more than 80 locations in Canada, a spokesperson said. Larian, who runs MGA Entertainment, will use his own money for the bid, along with financing from banks and additional investors, according to a press release. ‘The liquidation of Toys ‘R’ Us is going to have a long-term effect on the toy business. The industry will truly suffer,’ he said in a statement. ‘The prospect of bringing the Toys ‘R’ Us experience to a new generation, my new grandson’s generation, is enough to motivate me to Save Toys ‘R’ Us.’ Toys “R” Us declined to comment.”

Can you imagine being ready, willing and ABLE to spend $887 million dollars—of your own money—to prevent some 280 Toys ‘R Us stores from closing? Is Larian truly serious? It appears so. The CNN article goes on to reveal that the billionaire’s long-term strategy for saving 280 failing stores goes far beyond providing a heartfelt or nostalgic shopping “experience” for his grandson’s generation. Here’s what his plans REALLY are:

Larian’s vision for Toys ‘R Us includes turning its stores into entertainment hotspots. ‘We will make Toys ‘R Us an experience in and of itself; a fun and engaging place where families can spend an entire day,” he said in his statement on Friday. ‘Imagine a mini-Disneyland in each neighborhood.”

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Been There, Done That— Larian’s concept of converting old Toys ‘R’ Us stores into “Mini-Disneylands” has already been tried—and failed. This one, the chain’s flagship store in New York City’s bustling Times Square district, was big enough to fit a ferris wheel inside! Guess what? Yup. It’s closed now. If this mega-store concept didn’t work in Times Square, with all of its never-ending foot traffic, how could it succeed elsewhere? How much do you think they’d have to mark-up TRU toys to pay for all of this? Perhaps Larian should give his ambitious plan a teeny bit more thought. (Photo: tripadvisor) Click to enlarge.

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Can You See Them NOW?— Before closing, the TRU flagship store in NYC also had the added benefit of a giant, wraparound video marquee. Can you imagine something like this surrounding Larian’s proposed 280 “mini-Disneylands” in the U.S. and Canada? Would such a monumental investment in time, material, and CASH really be worth it? Or is the lure and ease of “one-click” and “add to cart” online shopping simply too powerful for “brick-n-mortar” retailers to overcome? (Photo: tripadvisor) Click to enlarge.

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Welcome to Barbie Town— You’ve heard of the famous (also now gone) “Barbie Aisle,” right? Well, how about an entire Barbie TOWN? This amazing retail display was also in the NYC TRU store before it closed. Imagine a similar structure built by Hasbro called the “GIjOE PX” or something like that, full of Joes, Jeeps, equipment sets and more. Hey, we can dream, can’t we? (Photo: tripadvisor) Click to enlarge.

Bottom Line: This is all so FASCINATING. And hopeful. And exciting! But will ANY of it actually come to pass? Will Larian’s offer be accepted? Will he really spend even MORE of his own money to convert a bunch of aging Toys ‘R’ Us stores into 280 “mini-Disneylands?” It’s been tried in major cities already, and sadly, it’s failed. To be honest then, its doubtful much will come of this new development. But don’t lose hope, dear readers. We’ll keep you updated as this ever-changing, high-stakes, and “quixotic” tale of money, family, and TOYS continues to unfold. Stay tuned!

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Hobbico Pre-Auction Stunner—Cross-Town Competitor Horizon Hobby Declares It Will Purchase Major Assets of Struggling RC Co.

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Meet the New BMOC in RC—Horizon Hobby. (Photo: Cameron Suhadolnik)

If Successful, “Purchase Would Close on April 6”

In a quick follow-up to our previous post about the fall of Hobbico, one of its main RC industry competitors, cross-town rival, Horizon Hobby, has made a substantial offer that may pave the road to Hobbico’s final financial destination. According to Ben Zigterman of the News-Gazette:

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Ben Zigterman, reporter for the News-Gazette (Photo: Ben Zigterman)

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“CHAMPAIGN — Hobby-product distributor Hobbico has found a buyer for its remote-control business: cross-town competitor Horizon Hobby. Horizon Hobby has agreed to buy several units of Hobbico for a combined $18.8 million…‘We believe this transaction, if completed, will further strengthen Horizon’s position as the market-leader in the RC industry,’ Horizon Hobby President and CEO Joe Ambrose said in a statement. ‘Horizon and Hobbico have served many of the same retailers and customers for years. Upon completion of this transaction, Horizon will work to provide a smooth transition within the industry.’ If completed, Horizon will be buying Hobbico’s Great Planes and Tower Hobbies divisions, as well as brands including Axial and Arrma. Hobbico had been asking for at least $22 million for these companies. The purchase won’t include Estes, United Model, Revell US or Revell Germany.

Additionally, ‘Horizon will not be assuming any of Hobbico’s debts or other liabilities in this transaction,’ Ambrose said. Following the auction, where Horizon would be the stalking-horse bidder, the purchase would close April 6. With a stalking-horse bid, the potential purchasers essentially set the floor bid of the auction in exchange for certain protections. If Horizon isn’t the successful bidder, it will receive a break-up fee of 3% of its base bid, or $540,000.”

Bottom Line: Once all of the auctioneering and legal “smoke” has finally cleared, it appears certain that Horizon Hobby will emerge the only so-called “winner” in this calamitous scenario. Hobbico was asking for $22 million, but $18.8 million comes pretty close. After the sale closes on April 6th, Horizon assumes the mantle of BMOC (Big Man on Campus) among all remaining companies in the RC hobby’s industrial complex. A big shout-out of THANKS to Ben Zigterman for his excellent reportage on this story. And we’d also like to wish everyone at Hobbico and Horizon all the best and sincerely hope that Hobbico is the LAST major (toy-related) company “domino” to fall.

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This is Gunna Be BRUTAL—The Hard Truths & Facts Behind the Demise of Retailing Giant, Toy’s ‘R Us

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In a fictional parallel to the real-world woes currently facing 31,000 Toys ‘R Us employees, Jack Nicholson’s character in the film, Broadcast News (1987), waits and watches, while all around him, fellow co-workers receive their pink slips during a company-wide, mass layoff. (Photo: 20thCF)

Bottom Line: Today, we’re keeping it VERY simple and jumping straight to the “bottom line.” Here then, is the so-called, “red ink,” regarding the harsh facts and realities of this sad event (as they are currently known to us) according to a story today on CNN:

  1. The news that Toys “R” Us is closing might conjure up wistful childhood memories for shoppers. But for the chain’s 31,000 U.S. employees, it means they’re out of a job.

  2. Mass layoffs are usually softened with a severance package, but Toys “R” Us employees won’t get any because of bankruptcy laws. They will get benefits such as health insurance and matching 401(k) payments from the company.

  3. Workers were promised 60 days pay, which is required under federal law, and they’ll receive that pay even if they don’t work the full two months.

  4. Traditional retailers are on the ropes, with a record 7,000 stores closing last year, according to Coresight Research. That’s more than triple the number of closings in 2016.
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Selling “All Assets” to Highest Bidder—Hobbico Prepares to Take the Next (and Saddest) Step in its Own Arduous Chapter 11 Bankruptcy Proceedings

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It’s Hammer Time!— Everything at Hobbico must GO, and go it shall, to the highest bidder at an auction being held March 29th in Chicago. Will the RC giant survive? (Photo: auctionclipart.com)

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Picking up the Pieces— What will remain for RC fans after Hobbico’s demise? Repairing a crashed 1:6 scale RC vehicle or plane may get a LOT more expensive once the company has liquidated all of its assets and parts become scarce. (Photo: rcplanecrashes.com)

While news of the imminent collapse of Toys ‘R Us continues to dominate national news headlines, another more local, but no less important story, is shaking fans and collectors of 1:6 scale RC aircraft and vehicles to their very core. We’re talking again, of course, about the upcoming demise of Hobbico, (formerly) one of the RC hobby’s leading manufacturers and distributors. Hobbico’s troubles hit very “close to home” around here. That’s because they’re headquartered just a few miles up the road from our offices here in central Illinois, Champaign-Urbana (C-U) to be exact. As such, we see and hear news that is related to Hobbico probably a little more often than the rest of the country, but the impending loss of ANY 1:6 scale product manufacturer—and employer—will undoubtedly send economic “ripple effects” outside of our local community, into the worldwide “toy economy” as well. Today’s updates come to us from News-Gazette reporter, Ben Zigterman, who provides the following intel on the company’s upcoming liquidation auction:

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Ben Zigterman, reporter for the Champaign-Urbana News-Gazette (Photo: Ben Zigterman)

“Having filed for bankruptcy protection in January, Hobbico plans to auction its assets March 26 in Chicago in a bid to find a buyer. The hobby-product distributor, which employs more than 300 people in the county, placed ads Wednesday in The News-Gazette and USA Today with notices of the auction, as required by the bankruptcy process. In the past couple days, former employees also told The News-Gazette they had received notices about the auction, which will be followed by a hearing on March 28. When Hobbico filed for Chapter 11 bankruptcy protection, it said it had added too much debt and faced ‘an increasingly competitive industry, market headwinds and a series of one-off events with key suppliers.’ It also said that it had an estimated 200 to 999 creditors, $10 million to $50 million in assets, and $100 million to $500 million in liabilities. In recent court documents, Hobbico also indicated it had $114 million in revenue in 2017, down from $175 million in 2016. Hobbico asked for a minimum bid for all the assets at $38 million, or less than that for different parts of the business, according to court documents.”

hobbicologoBottom Line: This latest, saddest phase of Hobbico’s Chapter 11 bankruptcy saga parallels the similar travails currently going on at Toys ‘R Us, which is unsettling to many, to say the least. The March 26 auction up in Chicago will completely hand the reins of Hobbico over to whomever (or whatever) “new ownership” may step in, and those new owners must then decide the fates of hundreds of hard-working employees and what—if anything—can (and will) be done to keep the company afloat.

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A Real Pain in the Wallet—Hasbro and Mattel’s Stock Values Take Immediate Hit After News of Toys ‘R Us’ Imminent Liquidation Announced

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Stop the Madness— It’s like dominos—If Toys ‘R Us fails or “falls down,” then toy manufacturers too, may begin to fall—like dominos. And if that actually happens, we’ll all have to start buying those wooden “educational toys” peddled at local farmer’s markets. Oh, nooooo!!! (Graphic: dreamtime)

And so it begins— Yesterday’s news of Toys ‘R Us “facing its finality” sent immediate shockwaves throughout the toy industry, reflected most clearly by a corresponding drop in both Hasbro and Mattel’s share values. Hasbro survived yesterday’s economic “ripple effects” better than Mattel, dropping -2.06%, while Mattel fell a whopping -7.11%—in just 1 day! According to MarketWatch: 

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“Mattel’s stock has tumbled 36.6% over the past 12 months and Hasbro shares have lost 4.1%, while the S&P has gained 15.8%.”

Bottom Line: Ouch. Anyway we look at it, while the economy and stock markets continue to perform strongly, the toy industry is now officially headed in the other direction. Fortunately for both Hasbro and Mattel, the stock market closes today at 1PM, hopefully shielding them from any further losses—at least until Monday. Stay tuned. We may need to revisit this topic frequently.

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Toys ‘R Us Preparing to Call it Quits in the U.S. Toy Business—Complete U.S. Liquidation Coming Soon

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If every one of his stores close, Toys ‘R’ Us’ mascot, “Geoffrey” may soon be a homeless company mascot. (Graphic: Toys ‘R’ Us)

Attempts to “Find a Buyer” Evaporated

Prepare for the end, boys and girls…

It appears that Toy’s ‘R Us (TRU) has failed in its ongoing efforts to restructure its debt and will be forced into complete liquidation of its assets as early as next week. This will include the closing and selling off of its entire chain of U.S. retail stores. The profound economic “ripple effects” that will occur are sure to hit toy manufacturers hard, as well as an untold number of smaller toy companies and distributors. According to today’s article in the UK’s Daily Mail:

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“It’s anticipated that toy manufacturers will suffer if Toys ‘R’ Us does liquidate in the U.S., as the company accounts for about 15 per cent of American toy sales. In addition, Toys ‘R’ Us was known for giving small companies and new products a chance, whereas other toy-selling retailers, such as Walmart and Target, prefer to go with tried-and-true merchandise.” —UK Daily Mail

Bottom Line: There’s not much more we can say on this matter at this point. Toy fans around the U.S. are surely aghast at the prospect of losing ALL of its Toy’s ‘R Us stores. We thought at least a few would remain open, but that appears to be wishful thinking on our part. If you’d like to read the entire article in today’s UK Daily Mail, jump HERE now.

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The Future of Toymaking?—Hasbro’s New “HasLab” Crowdsourcing Initiative Attempts to Raise Funds For Production of Star Wars’ “Jabba’s Sail Barge”

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Will They Succeed?— This computer-rendering of HasLab’s (first-ever) crowdsourced toy project, “Jabba’s Sail Barge,” reveals the incredible potential for similar collector-driven toy projects in the future. But questions remain: Will HasLab succeed? Is crowdsourcing the future of toy production? Will fans be able to sustain “toys” that costs them $500 a pop? (Photo: HasLab) Click to enlarge.

In what may be the clearest view yet of toy-making’s future, Hasbro has just launched its new “HasLab” crowdsourcing initiative. The goal of this particular collector-funded toy project will be to locate and sign up at least 5,000 fans who are willing to pony up $500 each for an exclusive, 4-foot long (compatible w/3.75″ figures) “Jabba’s Sail Barge” from Star Wars. A prototype shown at Toy Fair and all of the computer renderings online look absolutely GORGEOUS. If Star Wars toys are your thing, you should watch HasLab’s customer recruitment video shown below.

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Aiming High— HasLab’s new business model may reflect the future of “high-end” collectible toy production. The potential for such crowdsourced toys would seem to be sky-high. (Photo: JpM)

haslablogoBottom Line: If this approach to “high-end” toy production is successful for Hasbro, you can expect to see similar efforts forthcoming from other toy manufacturers in the future. Perhaps Hasbro would even consider creating something new, big and amazing for 12″ GIjOEs? How about an updated, more realistic version of a 1:6 scale USAF Crash Crew Truck? Joe fans can dream, too!

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Hasbro Bluntly Urges its Loyalest Customers to “Ditch the Digital Distractions” (and Return to Toys) in Mass E-mail Promotion Released Today

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How to Help Hasbro Stem the Flow—In this screenshot (taken today) of our email “inbox,” the subject heading of Hasbro’s most recent mass emailing urges consumers to “Ditch the digital distractions.” Digital devices such as cell phones and video games are a growing threat to an already beleaguered toy industry. This latest plea from Hasbro appears to confirm that fact. Click to enlarge.

An Open Admission of a Major Threat to a Struggling Toy Industry

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“Ditch the digital distractions.”

Those four powerful words are actually quite revelatory coming from a company like Hasbro. Giant corporations that generate billions of dollars in sales—per year—typically want nothing more than to paint the rosiest of pictures (regarding their businesses) for their customers and of course, their stockholders. But for a few years now, toy industry analysts (including those here at The Joe Report) have been openly ruing and discussing how two specific inventions—the cell phone and the video game console—have largely been responsible for precipitating an industry-wide slump in toy sales; not to mention the bankruptcies and closings of major toy retailers (i.e. Toys ‘R Us, Hobbico, etc.) and the scariest thing of all—the growing LOSS of the toy industry’s  historically primary customer base—CHILDREN. Yes indeed, those are four POWERFUL words.

One BIG Question Remains—Will Children “Tune Out” of Toy Fandom FOREVER?

Remember the days when toy companies simply had to urge us to “Collect ’em All!” and we’d frantically beat a path to our local toy store to comply? Sure ’nuff! And growing up, we’d watch all of those Hasbro and Mattel commercials on TV, see their products displayed in store windows, and peruse their ads in endless pages of comic books. By the time we’d finally convinced our parents to take us to the toy store, our desires had become almost Pavlovian. See the toy—want the toy. Remember the mad scrambles over Cabbage Patch Dolls back in the 1980s? The idea of that sort of consumer “scrum” over ANY toy today seems almost quaint. It’s just not likely to happen.

Forgotten how to PLAY? (Photo: The Finder)

Bottom Line: This latest email from Hasbro may be nothing—or it may be something. How’s that for a wishy-washy conclusion? Regardless, we’re sure that the “big boys” over at both Hasbro and Mattel would be THRILLED to see some of that ol’ “rabid” consumer interest in their products once again. But thanks to today’s dreaded digital distractions, that sort of mania doesn’t seem likely to happen ever again. In fact, the current, ongoing, DECREASING demand for nearly all categories and brands of toys continues to paint a gloomy (rather than rosy) picture for the industry. It clearly has MANY manufacturers worried (see our previous story HERE). Fingers crossed for better news!

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