About Toy Jobs

This will certainly NOT be a good year for the toy industry but at least the holiday sales season appears to be finishing strong. While American households are feeling pretty dour in opinion polls, they seem to be spending heavily both online and in the stores.

Annual sales volumes will be negatively affected by what had been a constantly changing tariff environment which led both retailers and manufactures to hit the “pause” button. In the end that left manufacturers with about ten weeks less time to produce goods and ship them to the States. That will likely mean that some popular items will sell out quickly with less than optimum sales volumes. One silver lining is there shouldn’t be many left over goods and consequential markdowns.

Additionally, we are experiencing a bifurcated economy. While inflation is lower, prices remain high. Tariff inflation is particularly tough on the toy industry due to the difficulty in switching manufacturing out of China. Even if you manage to move your production elsewhere in Southeast Asia like Vietnam or Indonesia or Thailand you are still facing a 19% tariff rate. Additionally, these alternatives don’t have the infrastructure of suppliers, logistics or skilled workers so that production can actually cost more in the end. High prices mean that less affluent households have been pulling back while upper and middle – income consumers are racing ahead. Overall holiday sales may be robust, but much of that is likely because in a K-shaped economy the top part of the K has a greater effect on total consumer spending while the lower part of the K has greater numbers in terms of population.

What does this mean for toy industry hiring? As we have said before, toy hiring rebounded in July as companies found firmer footing. That has continued through Thanksgiving. After Thanksgiving, search starts have slowed but that’s just part of the annual cycle as companies watch and wait to see how holiday sales turn out. They then typically crunch numbers through mid-January.

My gut feeling is that holiday sales will be strong and that then hiring will regain momentum. While the overall January pay days for toy companies will be down, there seems to be a feeling that we’ve made it through the woods and can begin to breathe a bit easier. Unless of course another monkey wrench is hurled in our direction. And I must say that in the current environment the chances of encountering random monkey wrenches are greater than normal.

In an alternative universe, come January uncertainty will reign. Companies will wait for some event which signals greater certainty about the direction of travel. That event could be geopolitical. It could be to wait until New York Toy Fair when companies have a better indication of how they will fare in 2026. It could even wait until after the April L.A. Toy meetings.

It’s impossible to know which of these scenarios will play out. I’m leaning/hoping towards the first one but….. My advice (as almost always) is to remain cautiously optimistic. Husband your resources. And move forward while remaining on high alert.

Walk Don’t Run.

Happy Holiday Sales Season

All the best,

Tom Keoughan

This note will be short and sweet (Thank God, you say) and with good reason. Normally, at this time, I would be giving you a review of the LA Fall Preview but I’m afraid this year I can’t do a very good job at that. The reason is that I had to cancel my trip to the show. Toy Industry hiring has been fast and furious. I had so much work to do that I couldn’t afford the time to go to LA and drum up more work.

I also knew from experience that after a trade show companies head back to the office and count numbers and crunch beans (did I say that right?) for about two weeks and then – all hell breaks loose. Companies press the go button on spending that was dependent on the results of the show. I didn’t want to be all backed up when that wave hit. Fortunately, I am now caught up or will be by Friday – just as the second wave is starting to arrive.

Toy Industry hiring tends to follow an annual cycle but this year that pattern has been disturbed – primarily by tariffs. Think of it as a hiring El Niño. The Year started off with a bang. Companies were hiring hand over fist. Then, Liberation Day arrived. On the day, the thing that was liberated most was company profit margins. Spending and hiring quickly dropped off a cliff. Even job offers that had already been made were quickly pulled back. The entire industry became deer in the headlights.

The fact that there was going to be tariffs was bad enough. The bigger problem was having no idea what they were going to be. Tariff numbers and proclamations changed every day. It was nearly impossible to even begin to plan.

In late July, the picture began to solidify. The outlook for 2025 isn’t good but at least we know what it is. And so here we are. All the spending for the year is happening at once and happening fast. The toy industry, after all, does have an annual sell by date. So, it’s get moving or get trampled.

Getting back to my “review” of the LA Fall Toy Preview, I hear it went quite well. Most people I spoke with had full dance cards and business was getting done. I’m told that the new Toy Building is fantastic. I’m looking forward to seeing it in April.

There were two places that people suggested that there was room for improvement. First, there needs to be shuttle buses. The buildings are pretty close but… a couple of shuttles doing endless loops would greatly improve things and make for less scrambling. Secondly, while the show “was” shorter and the Toy Association did get it down from 6 weeks to 5… If there’s any way to keep it to three weeks that would be a blessing. I know, I know we have to lay that at the feet of the retailers but – the only ones who seem to benefit are the overpriced hotel laundry services.

In closing – Make hay while the sun shines – or at least when there’s not a hailstorm – and squirrel it away – at least until the next crisis which is surely just around the corner.

All the best,

Tom Keoughan