In what looks like a repeat of last year, the toy industry’s big challenge this year appears to be the consumer electronics business. All indicators are that consumers will be torqueing their credit cards on wide screen TVs and DVD players. There is also the launch of next generation video game platforms. With “Bobby” getting a $500 Sony PlayStation 3 along with a small stack of video games/accessories, and Dad buying a mammoth flat screen TV “for the family” (even though it seems to only be able to tune in football games and golf); chances are there’ll be a lot less toys under the tree this year; especially when you factor in hundred pound fruitcakes and embarrassing holiday sweaters.
On the bright side, Christmas 2007 will not have new video game platforms launched and two years worth of widescreen TV demand will already have been satiated.
MGA’s pending purchase of Little Tikes should be interesting to watch. We have no doubt that Isaac Larian will take great glee in trying to poke Mattel’s Fisher Price unit in the eye. Fisher-Price, however, is a colossus. Its brand recognition, product line and execution are all very strong. Mattel President Neil Friedman knows exactly how to manage this business although it is possible that he may be distracted while trying to rescue Barbie and the rest of Mattel’s El Segundo operation. MGA doesn’t have a lot of experience running its own manufacturing plants. The bulk toy business means lots of expensive plastics, resins and transportation. Manufacturing plants also mean lots of employees to manage–never an MGA strong suit. This being said, there is plenty of fixing up that can be done. Little Tikes and indeed all of Newell Rubbermaid’s operations were put into a downward spiral due to the disastrous management policies of fired CEO, Joseph Galli.
Over at Mattel, Neil Friedman has the Fisher-Price division in very strong shape – strong brand recognition, strong new products and strong execution. The new TMX Elmo looks to be a runaway hit and the Kid Tough Digital Camera looks very strong. Hopefully, Friedman can work his magic on Mattel’s El Segundo operation for 2007. This year’s El Segundo product line isn’t his and previous “leadership” has left him with such apparent boondoggles as – “Tanner” – The Defecating Dog!…He Eats, He Poops!” What were they thinking? Seven year old boys are going to love this and little sisters everywhere are going to be repeatedly tortured. Also, in stores now – Botox Barbie! Stick your finger in her back and watch her face…you just really have to see it for yourself. Products like these are like landmines left for new management by the Bousquette team as they were chased from the building.
Finally, noted jackasses Charles Schumer and Lindsay Graham delayed action on a bill to levy a 27.5% tariff on all Chinese made goods. Do these idiots have any idea how many thousands of US owned businesses design, market and sell products that they have contract manufactured in China? The Schumer-Graham bill would gut their profit margins (you can bet Walmart isn’t going to move its precious price points) and drive many, if not most, of these companies out of business. If anything gives China an unfair advantage in world markets it’s the fencepost level stupidity of America’s lawmakers. Somebody ought to vote these geniuses out of office…and fast.
One also wonders if there is anyone even slightly awake at the TIA. Do they have a lobbying effort on this? Has anyone heard about it?…didn’t think so.
See you at the October show,
Tom Keoughan
