Big toy companies already suffer from the Toys R Us bankruptcy rumors

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Image credit: Flickr (CC) / Mack Male

A new set of reports and rumors claim that Toys R Us will indeed file for bankruptcy as soon as this week. This already has a bad effect on toy companies.

According to Reuters, Mattel and Hasbro already suffer from falling shares on the financial markets. The situation is not helped by Toys R Us who so far are declining to comment.

This adds further fuel to the fire. Toys R Us is one of the three biggest customers for Mattel and Hasbro. The other two are Wal-Mart and Target. Still, Toys R Us is providing about 10% of the total global revenue for Mattel and Hasbro.

You can imagine what a problem it would be for them if both companies suddenly are without their third biggest customers. “If there is any kind of bankruptcy filing, it will have a major disruption for all of the toy suppliers,” said Lutz Muller, chief executive of toy retail consultancy Klosters Trading Corp. “Toys ‘R’ Us needs to have money in place to get merchandise on the shelves ahead of the holiday season.”

Toys R Us is actually the second largest toy retailer in the US. The first one is Amazon. So, the potential loss of Toys R Us will be felt in the entire toy market.

There’s still a lot of unknown in the situation. If Toys R Us indeed files for bankruptcy what will happen to the hundreds of stores? Will they have a new owner? Will they close down after huge stock sell-offs? So far pretty much nothing is clear which is actually the bigger problem. Especially for those working at these stores.

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