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January 16, 2020

Comments

Michael Kohner

I agree 100%. My concern is for survival of the small and medium size Toy and Game Manufacturers.

...But let’s acknowledge that TRU was also a museum of stiffs and write-offs and was run somewhat on a Ponzi scheme of charging marketing dollars on the way in and markdowns on the way out. There was a massive amount of inefficiency in the TRU model which ultimately imploded on them. It’s tempting to get nostalgic about TRU but for the last decade of its life at least, it was a bad business.

And what that covered up for were inefficiencies in the toy market - too many SKUs, too much tooling, too many underperforming brands and licenses, too much inventory. All of this has been exposed.

I do worry for the toy industry with this news out of Target. There are so many meta trends impacting the toy industry and almost all of them are headwinds. It’s no surprise to me that these companies like Funko, Just Play and Jaswares are benefitting from these shifts. The days of these big bloated corporate toy companies based around retail distribution and big load in quantities are over. You really have to run lean to be able to weather the storms.

Perhaps consumers were simply bored with the manufacturers’ move to low price point, low content-rich toys. It was a year without a breakout hit toy to drive consumers to stores. Manufacturers may need to put their creative hats on and come up with some compelling products.

Only have anecdotal evidence, but Target seemed to have trouble stocking what new toys there were for lines such as Marvel, Star Wars, and Jurassic World. Hearing from fellow fans and collectors, and visiting multiple stores in Central New York, Target seems to be bogged down with 1-2 year old toys for some of the brands I mentioned. After an initial push for Star Wars on October 4th, stores never stocked fresh product in December leading to the holiday. I walked out of Target w/ money in hand and ordered online but it wouldn't have been my first choice.

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