Toy tur­moil

Bar­bie’s world shaken by Toys R Us bank­ruptcy

The Prince George Citizen - - SPORTS -

NEW YORK — There’s trou­ble in toy­land, and com­pa­nies are blam­ing Toys R Us.

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’s 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.

Both com­pa­nies said they tem­po­rar­ily slowed ship­ments to Toys R Us ahead of its bank­ruptcy, and both said they are work­ing with the re­tailer to get their toys on its shelves dur­ing the hol­i­day sea­son.

Toys R Us had said when it filed for bank­ruptcy pro­tec­tion that it planned to work with sup­pli­ers and would keep its 1,600 Toys R Us and Ba­bies R Us stores open. It did not im­me­di­ately re­spond to a re­quest for com­ment Fri­day.

Even be­fore the Toys R Us bank­ruptcy, toy mak­ers have had trou­ble sell­ing their goods to kids today, many of whom would rather play with an iPad. Lego said last month that sales of its colour­ful bricks fell for the first time in 13 years, and an­nounced plans to cut 1,400 jobs.

Mat­tel, whose rev­enue in North Amer­ica fell 22 per cent in the three months end­ing Sept. 30, said about half of that de­cline was due to the Toys R Us bank­ruptcy.

Glob­ally, most of its brands saw sales de­clines. Bar­bie sales fell seven per cent and Hot Wheels fell six per cent. Sales of its Amer­i­can Girl brand, whose dolls typ­i­cally cost more than $100, fell 30 per cent.

“We sus­pected a rough quar­ter... but that was re­ally tough,” said an­a­lysts at Jef­feries.

To try and turn the com­pany around, Mat­tel said it plans to cut $650 mil­lion in costs over the next two years. It will also sus­pend the quar­terly div­i­dend it pays share­hold­ers be­gin­ning in the fourth quar­ter.

Shares of Mat­tel Inc. fell $1.37, or nine per cent, to $14 on Fri­day. Its stock has lost about half of its value since the be­gin­ning of the year. Has­bro shares dropped about two per cent on Fri­day.

But it’s not all tough news in the toy world: FAO Sch­warz, whose fa­mous New York toy store was shut down two years ago, said Fri­day it opened 190 FAO Sch­warz sec­tions in­side Bon-Ton, Car­son’s and other depart­ment stores that sell pi­ano mats, stuffed an­i­mals and other toys.

Even be­fore the Toys R Us bank­ruptcy, toy mak­ers have had trou­ble sell­ing their goods to kids today...

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