Closing Of ToysRUs Is Not The End Of Toy Industry

Posted: Mar 20 2018, 11:49am CDT | by , in Toys

 

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Closing of ToysRUs is Not the End of Toy Industry
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Analyst weighs in o the ToysRUs closing.

The demise of ToysRUs is not as dramatic for the toy industry as some analysts and Toy company CEOs make it sound. "Parents that would go to Toys‟R”Us for a birthday or Christmas gift will not stop buying that gift; they will likely go somewhere else for it. Consumers will not put an end to buying toys because their local Toys‟R”Us store closed its doors. That just defies logic, " says Juli Lennett, Senior Vice President at NPD Group in a blog post this week.

She is absolutely right. Just because a store closes, consumers will not stop buying the products they want. A lot more of toys will be bought online and in other stores like Walmart and Target.

ToysRUs represented about 12% of U.S. toy sales in 2017, according to NPD’s Consumer Tracking Service. With ToysRUs gone, the toy sales will though not drop by 12%, rather if at all would be in low single digits. The toy industry was the largest it has ever been in the history of the industry. In the U.S., the toy industry has grown 4.5 percent on average over the last three years, according to NPD.

What will be lost is the experience to visit a huge toy store that only sells toys. But maybe the plans to bring back KB Toys will create a new dream toy destination for kids.

ToysRUs is back at the bankruptcy court today amidst an uprising of its toy suppliers objecting the liquidation plans of ToysRUs. Today's hearing is important for the next steps in the ToysRUs wind-down process. Many toy makers have come forward with motions and filing opposing the plans of ToysRUs. There appears to be shaping up a big battle between creditors about who will receive the revenue from the ToysRUs store closing sales. Toy suppliers make the case that ToysRUs would sell toys that they do not own yet, as they did not pay the vendors yet for them.

Some toymakers demand the return of their toys. Lego, Mattel, WowWee, Zuru, and more have filed claims in the millions for unpaid goods that ToysRUs received or are still in transit. The supplies are not secured creditors and shipped their toys under trade deals to ToysRUs. Lego, for instance, assumed that ToysRUs would stay at least 16 months in business after the Chapter 11 filing.
The revenues from ToysRUs store closings and liquidations are usually first benefiting the secured creditors. It's up to the court how this will be handled in the ToysRUs shut down.

The ToysRUs liquidation plans are still in flux. The Canadian business unit might survive in combination with select US stores if a buyer can be found.

ToysRUs will start the process of closing sales at 735 remaining ToysRUs U.S. stores, including stores in Puerto Rico. While its open to you to score some closing sale toy deals or not, you definitely need to make sure to use your ToysRUs gift cards now. ToysRUs gift cards will be worthless very soon.

The ToysRUs closing sales begin soon according to a statement on the ToysRUs site. Expected savings will be up to 30%, based on the discounts we see in the ToysRUs closing sales in the UK.

Check out also our Easter Toy Gift Guide for 2018. Get the free Tracker app to get notified when the hottest toys and most wanted amiibo of 2018 are in stock online. You can already subscribe to be notified when Pomsies, Fur Babies World, 5 Surprise ball, and more hot 2018 toys are in stock.

Read the latest hot toy news, shop the best-selling toys and follow us on Twitter for hottest toy announcements of 2018 at the Toy Fair 2018 in New York. See also the highlights of the Spielwarenmesse 2018 in Nuremberg and Toy Fair 2018 in London.

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The Author

<a href="/latest_stories/all/all/2" rel="author">Luigi Lugmayr</a>
Manfred "Luigi" Lugmayr () is the founding Chief Editor of I4U News and brings over 25 years experience in the technology field to the ever evolving and exciting world of gadgets, tech and online shopping. He started I4U News back in 2000 and evolved it into vibrant technology news and tech and toy shopping hub.
Luigi can be contacted directly at ml[@]i4u.com.

 

 

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