Toys 'R' Us Bankruptcy May Reduce Manufacturing Orders, Toy Association Says

The Chapter 11 bankruptcy filing by Toys 'R' Us could reduce new orders of toys in the near future, said Steve Pasierb, president of The Toy Association, in a letter. "In addition to the direct negative impact on some companies, the flood of liquidation product from [Toys 'R' Us] can likely weaken sales at both mass and specialty retailers," he said. "Likewise, there will be a short-term negative influence on orders coming into our manufacturing members, at least until the ramp-up happens to stock for the 2018 holiday season." The toy industry is now "at an inflection point," he said.

Pasierb also mentioned the concerns for new tariffs as a result of a Section 301 investigation and noted that the association signed on to an industry letter to the administration (see 1803190025). "The Toy Association is aggressively fighting the threat of China tariffs that would extend to toys," he said. "We are participating in and helping to grow the leading coalition of hundreds of organizations opposed to these tariffs. We and others are contacting the White House, administration officials, and congress to urge reversal of the tariffs being imposed. At the same time, we are encouraging the coalition to activate grassroots and media outreach in opposition to tariffs."