The toy industry dooms day clock gets a roll back

July 13, 2009

Two nightmares have been keeping some citizens of Toy Nation awake at nights. One is that Toys R Us’s credit facility would not be renewed next year and the company would go out of business. The other is that Wal-Mart is going to take an ax to its toy section.

Both of these have presented manufacturers with visions of a dooms day clock counting down to the industry’s final hours. Heightened by the recession, some toy manufacturers, reps and others have been worrying and talking about this since Hong Kong Toy Fair.

Well, everyone can now sleep a little better as Toys R Us has announced it has secured an extension of its $2 Billion credit facility to May 21, 2012. Congratulations are in order for a Toys R Us management team that has been doing pretty much everything right. As Clay Creasey, Toys R Us CFO put it: "This is a strong vote of confidence from our bank group, and serves to further strengthen the company and position it for future growth."

The dooms day clock has been set back. Maybe Wal-Mart will give us some good news and we can take it off the wall.

Posted by Richard Gottlieb on July 13, 2009 | Comments (4)

July 15, 2009

In response to: The toy industry dooms day clock gets a roll back
Randomtechnology commented:

While I appreciate that a Walmart order can make a huge impact on the bottom line in any company and certainly these large orders keep factory doors open and production capacity available for other products. However, big box stores like Walmart, Toys R Us and Target have been a major negative force, driving quality out and lowering the SKU count in the mad rush to lower costs and "volume" pricing. You mentioned going to a small store in Soho , asking questions about products ... try to find something new at a walmart..or someone to ask a question at Target. This is not the future of the toy industry. The industry needs shelf space devoted to more items not shelf space dedicated to more volume

July 15, 2009

In response to: The toy industry dooms day clock gets a roll back
Rod Hoffmann commented:

Once again, industry focus is on big box retailers. Wally World's revamp and toy selection reduction just gives the smaller (to me more important to our industry's survival) retail some room to expand and offer the consumer what the big box stores won't.

July 15, 2009

In response to: The toy industry dooms day clock gets a roll back
TRU Fan commented:

If TRU was smart they would take advantage in the advertising touting the large selections once again. They can now claim they are the "Worlds Biggest Toy Store"

July 15, 2009

In response to: The toy industry dooms day clock gets a roll back
Wal*Watcher commented:

Have you scene one of the remodeled Walmart's? There is enough empty space you could bowl. With the new shorter shelves (they used to hold extra inventory up top) you could pilot a Cessna from one side to the other and I doubt any one would notice. I have to believe that these are temporary cost saving efforts being passed off as a remodel. I can only hope somewhere in Bentonville there is a plan to reset all these stores with more SKU's per department when the economy gets better.