Retail

Toy Sales Stumble In First Holiday Without Toys R Us

Toy Sales Stumble Without Toys R Us

The toy industry saw a dip in sales during its first holiday season without Toys R Us.

Data from market researcher NPD Group showed that U.S. customers spent $21.6 billion on toys last year, less than the $22 billion spent in 2017, representing a 2 percent drop in sales.

“After the liquidation announcement of Toys R Us last year, there was a great deal of speculation about what would happen to the industry, with some predicting double-digit declines,” Juli Lennett, vice president and industry advisor at NPD Group, said in a press release.

But Lennett noted that the 2 percent decline was still a “solid performance,” considering that Toys R Us was estimated to account for 10 to 15 percent of all toy sales before it shut down all of its U.S. stores in June. The retailer had over 700 locations in the U.S., and approximately 1,600 stores globally.

NPD’s data also showed that dolls had the strongest growth, mostly due to L.O.L. Surprise!, Barbie and Hatchimals, followed by action figures, with sales from Jurassic World, Marvel Universe and Beyblade driving most of the growth. Cool Maker, Cra-Z-Art and Kinetic also made gains for arts and crafts, while Fingerlings, Kidi and L.O.L. Surprise! gave a boost to the youth electronics category.

“While TRU recapture was significantly lower than initial forecasts, the gap to expectations is well-known and factored into current stock prices,” Jefferies Analyst Stephanie Wissink said in a research note, according to CNBC.

In the meantime, it was reported in October that lenders were looking to revive the Toys R Us brand by reorganizing its assets into a new company.

“The company did generate operating profits — and without debt, its profitability would be easier to maintain,” Seth R. Freeman, senior managing director at GlassRatner Advisory & Capital Group, said at the time. “Still, the timing of this move means the new company misses the critical holiday season.”

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