Spin Master says retailers new AND old fighting For Toys ‘R’ Us market share

Rival retailers are working on plans to fill the vacuum left by the demise of Toys “R” Us in the U.S, and U.K., Canadian toy maker Spin Master said Wednesday.

Both existing toy retailers and new players are competing to gain the bankrupt toy retailer’s 12-per-cent market share in the U.S., Ben Gadbois, Spin Master’s chief operating officer, said during a conference call.

The company, a supplier to Toys “R” Us, incurred a Us$15.2-million bad-debt expense in the first quarter, af- ter determining it is unlikely to recover anything from the Toys “R” Us liquidation.

“There’s a lot of non-traditional players that are very eager to also enter the toy category sales,” Gadbois said. The company believes up to 90 per cent of the retailer’s sales will be absorbed by other retailers later this year, but expects the American industry will face about a twoper-cent hit.

Spin Master, which makes popular toy brands such as Hatchimals and Paw Patrol, expects its second quarter will be challenging as the biggest impact of the retailer’s liquidation is felt.

Spin Master reported net income fell nearly 14 per cent to US$8.7 million or nine cents per share in the first quarter. Adjusted profit was US$22 million, or 22 cents, compared with US$13.6 million or 13 cents the same quarter last year. The profit beat analysts’ estimates of 15 cents per share, according to data compiled by Thomson Reuters Eikon.

Revenue for the quarter ended March 31 increased 25.5 per cent to US$285.7 million.

Spin Master closed 7.3-percent higher Wednesday at $53.57.

A LOT OF NON-TRADITIONAL PLAYERS THAT ARE VERY EAGER TO ALSO ENTER THE TOY CATEGORY SALES. — BEN GADBOIS