Toymakers have less play with Toys R Us gone
Roger Dreyer was about to get the chance of a lifetime — his Fantasma toy company’s Nuclear Neon Slime was going to get the sweet spot of being in the checkout lane of Toys R Us stores across America.
Then word came that the toy store chain was on the verge of going out of business. And “that (chance) ended as quick at it started,” Dreyer said.
Toys R Us’ announcement that it intends to liquidate and potentially close its remaining 735 U.S. stores is a blow to major toy makers. But it’s the small companies, such as Dreyer’s, that will get hurt the most.
Toy making giants Mattel and Hasbro counted on Toys R Us for a sizable chunk of their sales. But smaller
brands often got a game-changing amount of exposure when they were featured on the shelves of the chain, which had the space and year-round focus to promote lesser-known items.
“They were the one bastion where you could show the full line of your products at bricks and mortar, and it’s going to be a shame to see them go,” says Neil Friedman, CEO of Alex Brands, a toy company based in Fairfield, N.J.
Walmart and Target, the other key players in the toys space along with Amazon, are more likely to stock up on top-selling gadgets and action figures than to take a chance on new products, says Ray Wimer, a professor of retail at Syracuse University.
“They’re only going to carry the best-selling toys and games,” he says. “They’re not going to experiment. ... So losing Toys R Us for the small toy manufacturer is a big hit for them.”
Fantasma Toys, a 17-year-old New York City-based company, specializes in magic products along with remotecontrol spiders and various slime concoctions. Dreyer said Toys R Us gave him a wider berth, featuring seven of his products as compared with other retailers that just sold two or three.
But there may be good news for some. Dreyer says he has been approached by two large retailers that are now looking to expand their selection of toys.
“Toy companies like us are going to be hurt for a short period,’’ he says. “But there are a lot of retailers that are now looking to capitalize on Toys R Us’ demise.’’