Toy industry turmoil continues with KB Toys preparing to close over 200 stores. The toy division of Toys R’ Us is up for sale and any buyer’s also likely to close somewhere near 200 stores. Walmart had a Thanksgiving weekend mini-stumble, but lets not shed too many tears, they were quickly back with a vengeance. Actually, it’s sort of nice to see that they’re not completely infallible.
On a brighter note, the Kmart-Sears tie up should create a stronger although still weak competitor and there is a very good possibility of much increased toy inventory on all those Sears shelves. We can argue all night about geopolitics (come to think of it, we probably have) but in the retail space, anything that leads to a more multipolar world is good for everyone.
It seems likely that toy manufacturers will be able to push through some moderate price hikes for 2005. That even as we can envision manufacturing costs coming down somewhat due to lower oil, resin and transportation prices. This seems to add up to lower sales volume but wider margins for the coming year.
Through all this, toy industry hiring has continued unabated. Here at Toyjobs, we are in the process of posting our second best year out of twenty-three. Going forward, successful companies will have to be nimble, smart and retain the very best people.
Here’s to a happy and profitable Holiday Season,
Tom Keoughan
