The showrooms in Dallas this year were all buttoned up tight – not so open as it was in years past. I'm not sure the reason, but protection against knock-offs was mentioned, and perhaps when a few companies close their showrooms, others quickly follow suit. It makes for a sterile visual environment with aisles of white walls and posters, and very little product to be seen. Times change.
From a medium sized Chinese factory owner we learned that this year's economic downturn, cost increases, and other pressures will force closures of another 10% of the remaining toy factories. This comes on top of the 30% of the toy factories that were recently lost as a result of a perfect storm of increases in cost of labor, labor shortages, electricity shortages, and material cost increases. With business down 15% this year on top of last year's drop, this factory is grateful that it is not worse, all things considered. They are still able to "sit up and take nourishment," as my father-in-law used to say. They will live to fight another day and bask in the warmth of the good years that surely lie ahead.
From another toy company executive, we heard that some factories will not even quote on toy products any more. Margins are too thin, too seasonal, and too changeable from year to year. For many factories, changing over to production of textiles or other product categories is more reliable, stable, and profitable from the factory owners' point of view.
What next, locusts?