Historic Peninsula Hotel in Kowloon
Hong Kong is a city that has seen a lot as has the toy industry. For that reason, it is not surprising that both appear to be shrugging off last week's sharp drops in the Chinese and global stock markets. I spent time across the harbor in Kowloon yesterday and those toy industry veterans I spoke with while there are not concerned. They are thinking about the great year they just experienced and expressing confidence that 2016 is going to be prosperous as well.
In part, the Chinese stock market drop was due to over capacity in manufacturing. That plus the continuing fall in the price of petroleum should preclude increases in toy prices. That is being confirmed in my conversations.
I am hearing that there was significant inventory carry over on a lot of the secondary Star Wars product but I am also hearing that the movie will continue to have a positive impact on sales for the first six months of 2016. As a result, that carry over should eventually sell, hopefully without markdowns.
The Hong Kong Toys & Games Fair opens today and I am heading to the opening. More to come…