BY JAY FOREMAN, CEO Basic Fun
Happy New Year all! It’s been a while since my last blog and what a long strange trip it’s been this past year for me, Basic Fun, our entire industry and for the USA! Wow! Hard to find a place to begin. The year started off pretty poorly for a lot of us with a very slow first half following up a very challenging and slow back half of ’23. For most toy companies the year was flat overall, which again given the tough start was as good a result as many could hope for. No doubt we need more kids being born, less time on digital devices, and more dynamic product at retail.
The trade has been blessed with a few really strong ranges like Squishmellows and mini toys, but those concepts have been around for a while, and our industry needs some new news in 2025. While we know a strong slate of films is due to hit the scene in ’25, there are still too many sequels. Wicked was a very positive follow up to Barbie, and we need more new, original content to excite consumers–not to mention getting butts in movie theater seats to get that shared entertainment experience. Hollywood, let’s go!!
As for Basic Fun we had rollercoaster year in 2024. Heading into the summer, our trailing 12 months were really crummy, which gave our banks some heartburn and pushed me to take some drastic and emotionally painful action. It wasn’t easy to put my business into a restructuring…which unfortunately is referred to as a bankruptcy. However, I made the decision to put on the big boy pants and face things head on openly and honestly–first with myself and then with the industry.
It wasn’t easy, but it was the right move. I told everyone that it wasn’t a cash flow issue, and not only would none of our partners lose a dime, but we’d be in and out in record time. And that’s exactly what happened. We went in and out of the process in less than four months, and we are now bigger, better and more stable than ever with fresh capital to invest in growing our platform. Best of all was that the second half of ’24 was our best ever and we ended the year up 32 percent over ’23 chalking up seven record high shipping months thanks to key brands like Littlest Pet Shop and Care Bears.
Along the way in 2024, we all experienced another year without a NY Toy Fair but a growing market place in LA to show off our wares. Look for info on the new Toy Association building in El Segundo coming for Fall previews. Clearly, LA is growing while the attendance in Hong Kong continues to be anemic. One door opens; one door closes. For sure, Nuremberg is also growing despite real stagnation in the European marketplace.
A big question this year will be over New York Toy Fair in March. While it doesn’t seem like the show is sold out yet and many of the big exhibitors are taking less space, there are exciting new folks coming into the show and the building is going to be full enough for sure. Let’s hope the weather holds and attendance and quality is strong so the show sustains and thrives in this time period, albeit with a more specialty feel.
Of course, the elephant in the room is the big question on tariffs. Not that I ever have an opinion or anything to say about this topic…but here goes! I think we are going to end up being lucky on tariffs. In fact I’m betting that tariffs come it at 10 percent or less and possibly even (knock wood) no tariffs on toys from China at all! That’s right. I know a bold prediction, but it’s possible. Actually–and sorry to say it–but I’d bet that Vietnam has more of a chance of seeing tariffs and higher ones than China.
The fact is the US trade deficit with Vietnam is 10X, and our deficit with China or closer to 2X. 10X is not a good place to be and a huge target. Seems the smart money, from our vendors in Hong Kong and China, is betting on Indonesia over the mid- and longer-term as the option to de-risk China. I still believe in “peace through toys” and hope we can patch things up with China and keep our amazing hub of manufacturing in place for decades to come. You never know. We could end up with a settlement to the situation in Ukraine, the hostages back in Israel, and a deal with China for no tariffs. Fingers are tightly crossed and time will tell. We’ve got about two weeks of sitting on pins and needles! Hold on tight.
As for 2025 in the US market, overall the economy should be stable (of course unless tariffs come!). While our industry is not growing, it’s still a necessary one and it’s up to each of us big or small to work hard to bring new fresh and exciting product to market, or in the case of Basic Fun: new old product to market in a fresh way. Look out for our new Stretch Armstrong and new Home Arcade lines!
Happy New Year to you all and remember what’s good for one is good for all, so let’s hope for the best in 2025.
Jay
P.S. To all my and our toy friends in LA I put forward my thoughts and best wishes to you all as you endure these terrible wildfires. Living in the path of hurricanes get’s one used to impending doom but it doesn’t really hit you until you see your home in danger and impacted you just never understand the pain. However, as you recognize possessions can be replaced or remembered but family, friends, pets and memories is what’s most important. You will rebuild and be back better than ever and reimagine and live again your California Dreams and your lives on the Golden Shore.
if any one can evaluate the industry you can . have a good year