Toys “R” Us Gets the Flu and the Toy Industry Catches a Cold

6a0133ec87bd6d970b01bb08fe52c6970d A-cold-or-the-flu

When one of our crown jewels, Mattel, is struggling and our industry's showroom, Toys R Us, is in distress it destabilizes, not just the industry's economics but its health and its mood.

The toy industry does not feel good. It has a cold. We caught it from Toys "R" Us which has the flu.

Mattel is just the latest to get sick as on October 26 it announced that it had a worse than anticipated quarter and in so doing experiencing a sharp drop in sales (-22% in North America and -13% in the world). As a result it suspended its quarterly dividend. The cause sited was in large part due to Toys "R" Us.

Mattel is, of course,  not the only company feeling ill. Toy companies, big and small, are coming to grips with the impact of the Toys "R" Us bankruptcy and the impact it is going to have on their respective bottom lines.

But Mattel is, if not the crown jewel, one of the crown jewels of the toy industry. The company has been a leader since the 1950's and continues to be one of the industry's three giants: Mattel, Hasbro and Lego.

When one of our crown jewels, Mattel, is strugglling, and our industry's showroom, Toys R Us, is in distress it destabilizes, not just the industry's economics but its health and its mood. Yes, we have a mood and its not good.

We will get better but right now we don't feel real good. We have a collective cold.

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