Sales of toys, already in trouble, could be further hurt by virus
Shortages from factory shutdowns expected by summer
NEW YORK — From Baby Yoda to eco-friendly stacking rings, toymakers displayed an array of goods last week that they hope will be on kids’ wish lists for the holiday 2020 season.
The four-day Toy Fair, which ended Tuesday, comes as the U.S. toy industry has been whipsawed by a number of obstacles. The liquidation of Toys R Us in 2018 has hurt impulse buying of toys. Then the escalating trade war between the U.S. and China has added costs to manufacturers’ supply network. And now, a spreading new virus is threatening to delay product launches and may result in some shortages of seasonal toys starting in May.
Such challenges are on top of the pressures that toymakers face to create playthings that will excite kids who increasingly favor smartphones and other electronics.
Toy companies are hoping for a better year. U.S. toy sales fell 4% to approximately $20.9 billion in 2019 from the year before, according to NPD Group Inc., a market research firm. That followed a 1% drop from the previous year.
Many toymakers are counting on a slew of little Baby Yodas — the breakout character of the Disney+ streaming series “The Mandalorian.” Hasbro Inc., Lego Group Inc., Mattel Inc. and Funko are among the toy companies highlighting various versions of the doll, from plush to animatronic.
Here’s a primer for parents on toy shopping:
Shopping impact
The new virus has caused factories in China to remain mostly idle and shut down design and development offices.
Just about 30% of the workers needed are at the toy factories in China, according to Steve Pasierb, CEO of the trade group Toy Association. And many companies, from Basic Fun to MGA Entertainment, the maker of the popular L.O.L. dolls, warn
there could be fewer seasonal toys on shelves starting in May.
Zuru Toys, the maker of the hit toy Mini Brands, said it’s been forced to postpone the fall launch of a key plush toy. Get ready for delayed
launches from other toymakers, analysts say.
China represented 84% of U.S. toy imports in 2019, says Panjiva, a global trade research company. And many executives say there aren’t many alternatives outside of China that can offer the same kind of expertise.
“This is the crisis of the day for toymakers,’’ said
Marc Rosenberg, an independent toy consultant. He believes that Hasbro will fare better than others since it has been moving beyond toys into entertainment with its purchase last year of Entertainment One Ltd., a British entertainment company that produces “Peppa Pig,” and other animated shows for preschoolers.
Overall, Jim Silver, editor-in-chief of TTPM.com, a toy review site, says parents should put things in perspective.
‘’There are going to be plenty of toys,” Silver said. “Some things will be sold out, and a child may not get one of the hottest toys he or she wants, but they can pivot to something else.’’