NZ toymaker takes $38m hit from collapse of retail giant
New Zealand-owned toymaker Zuru will lose about $38 million in potential sales this year, due to the closure of Toys R Us.
Zuru director Nick Mowbray said the company sold almost $27m worth of its toys in Toys R Us stores in the United States, Canada, Europe, Africa, Asia and Australia last year.
It expected to grow those sales by up to 40 per cent this year, he said. However, Toys R Us collapsed last week, leaving ‘‘a big hole’’ in Zuru’s books.
‘‘The industry is going to be shaken up for a little bit and we are going to have to work out what to do to fill the hole.’’
Toys R Us announced it would close all 735 of its US stores.
All 100 of its stores in the United Kingdom would close, putting 3200 workers out of a job, after the administrator of its UK business failed to find a buyer.
The company said in the statement that it would continue to look for buyers for its businesses in Canada, Asia and some of Europe. Its operations in Australia and other parts of Europe were ‘‘considering their options’’.
Zuru was one of many toy manufacturers to take a hit from the Toys R Us collapse. Mowbray said it had left an $11 billion hole in the toy-selling market.
Toys R Us’ collapse was ‘‘on the cards for some time’’ and he ‘‘knew’’ it would happen, he said.
Toys R Us filed for bankruptcy in the US in September.
Zuru had contingency plans in place to make up for lost revenue and was acting on them, Mowbray said. It would double the number of staff working with e-commerce retailers such as Amazon and Walmart.
‘‘E-commerce [is] even more important now than what it was before.’’
Zuru was in a better position than other large toymakers because it made fewer types of toys, but more of them, so they reached a larger market.
It sold about 5 per cent of its supply at Toys R Us, he said.
Zuru makes its toys in China. It has no operations in New Zealand.