It’s been about a month since Toys R Us closed down in the US. Even before that the demise of the stores has had a big negative impact on Mattel.
Now Mattel has said that the bankruptcy of Toys R Us has had a serious effect on its sales for the second quarter of the year. Mattel’s sales are down 10% for the period.
Brands like Fisher-Price and Hot Wheels also experienced downfalls in their sales. As a result, now Mattel has to even resort to job cuts.
The company will cut 2200 jobs, which is 22% of its non-manufacturing workforce. Most of the job cuts are in the back-office and support. They are part of the cost savings plan introduced last October.
Even with that plan though Toys R Us has a bigger impact than expected. The net loss for the company is increasing.
“We see a lot of opportunities, but there has been a big discrepancy between our financial performance over the last few years and where the company should be,” Mattel’s CEO Ynon Kreiz said during a conference call with investors. He’s adding that Mattel is working on improving its online sales and focusing towards high-performing toys. The company is also planning on making new toy franchises.
