Toys R Us went down since it wasn’t making enough sales. Despite that the store chain was still very important to toy companies, including the biggest ones.
Latest data shows that both Hasbro and Mattel are now suffering quite badly after the demise of Toys R Us, MarketsInsider reports. The reason is simple – Toys R Us was bringing them quite a bit of revenue.
Hasbro’s latest earnings report shows that the company has a 7% drop in sales. This drop comes for the third quarter of the year – the first one without Toys R Us.
As a result, the company now readies a 5-10% layoff of its 5000 employees. “As part of Hasbro’s ongoing transformation we continue to make meaningful organizational changes,” Julie Duffy, senior vice president for global communications at Hasbro, said. “While some of these changes are difficult, we must ensure we have the right teams in place with the right capabilities to lead the company into the future.”
Mattel will announce its results later this week. The company is already struggling after it announced in July that it will lay off 2200 jobs. It also lost a lot of revenue because of the Toys R Us demise. So, things will be a bit tough.
For now the hope is on big store chains like Target and Walmart which have announced they will put a bigger focus on toys. Would that be enough it’s too early to tell. The coming holiday shopping season will be the first real test.