Coal in toy makers’ stocking this Christmas

By WND Staff

Editor’s note: Business Reform Magazine is your exclusive source for real biblical answers to real business problems.
www.businessreform.com

Toymakers are bracing for a rough Christmas season.

Already, FAO Schwarz has closed down and KB Toys has filed for bankruptcy, both events throwing a sense of chaos and even panic into the industry.

Meanwhile, sales are down at Hasbro, Mattel, and Harris Nesbitt by 2% for the year. These are ominous signs. They need the Christmas season to bail them out.

Three major factors are working against toy makers:

? First, major retailers account for the bulk of toy sales: Wal-Mart controls 20%, Target controls 18%. These big retailers are able to hammer down prices of manufacturers, and cut profit margins.

? Second, currently 75% of toys sold in the U.S. are made in China and Hong Kong, further putting price pressure on American firms.

? Third, the interests and focus of youngsters have changed markedly over the past few years, and toy makers have not always kept pace.

Video games and time spent on the Internet, cell phones and other gadgets have replaced traditional toys on our kids’ Christmas wish lists. Ten-year-olds now want cell phones; and teens have trended to computer technology. Parents find themselves having to spend $500 to $1,000 for computer systems, instead of far less expensive toys.

The California toymaker, JAKKS Pacific, perhaps sensing the parents’ dilemma, is offering simple selections and, at the same time, keeping prices down and sales are up.

But toy makers in general have been reduced to the hope that kids’ movies set to come out in the November-December time frame will spark higher sales. Otherwise, they may find coal in their financial stockings come the morning of December 25.

Steve Marr is the former CEO of the fourth largest import-export firm in the U.S., a company which facilitated international trade for many of the largest companies in America. Currently, Steve consults with with businesses and ministries utilizing ancient Biblical principles for success in today’s marketplace. Click here to contact Steve, or visit his website at www.businessproverbs.com.

Commentary