Hasbro's Woes Continue After The Fall Of Toys R' Us

by Jay Cochran
October 23, 2018
Hasbro yesterday during their earnings call said they would be seeing a 12% drop in third-quarter sales due to in large part the closure of Toys R' Us. In response to this Hasbro will be laying off 10% of its 5,400 global workforce which is said to save the company somewhere in the neighborhood of $40 million in annual costs.

Hasbro is also having to re-examine how they send products out to retailers such as shipping out smaller quantities to more retailers than what they had become used to while dealing with Toys R' Us. This year Hasbro has added 10,000 new places to sell its products at. Despite that places like Amazon insist upon smaller quantities and selling through that inventory before they are willing to order more products, and places like Wal-Mart, Target and Walgreens wait much closer to the holiday season before placing larger orders because they don't allocate the larger shelf space until late in the year since toys aren't the only things they sell. Toys R' Us would order holiday product months in advance in order to keep warehouses fully stocked for the holiday demand.

Hasbro plans on opening a new warehouse in the Midwestern U.S. next year that they will share with some retailers in order to try and cut down on delivery times of their products.

Hasbro's Chief Executive Brian Goldner said during the earnings call yesterday that they expect to continue feeling the effects of Toys R' Us closing for several more quarters.

Source: WSJ



Comments...

Last 10 comments - ( Read All Posts )
FASVB - 2018-10-25 @ 2:31 pm

The logistics are a huge problem. Always. This shared inventory could be an interesting way to solve the problem, but the retailers have to do their part. This fear of getting stuck with merchandise  is preventing  things to get going.  I understand Hasbro. Is much more expensive to send things in buts that sending them in bulk. The retailers know how much they sell. They must have people to calcule the sales of products and estimate the demand.  In doubt, order a little more. Otherwise the costumer will get very frustrated and go somewhere else.  They will always go to the place that always have stuff. 

To me both parts have their share of the "blame". TRU's doom was a hard blow indeed and the industry will take years to recover.

sXeblues - 2018-10-25 @ 6:31 am
22 hours ago, Goldbug said:

Smaller quantities??? Like it isn't hard enough to find things I want already!

https://www.reuters.com/article/us-hasbro-results/hasbros-revenue-misses-estimates-as-toys-r-us-blow-lingers-idUSKCN1MW1DD

This is the real problem! The retailers cannot sell what they do not have!!!

THIS.

Goldbug - 2018-10-24 @ 8:30 am

Smaller quantities??? Like it isn't hard enough to find things I want already!

https://www.reuters.com/article/us-hasbro-results/hasbros-revenue-misses-estimates-as-toys-r-us-blow-lingers-idUSKCN1MW1DD

Quote

"an inability to meet shipping demands of other retailers."

This is the real problem! The retailers cannot sell what they do not have!!!

Thinwheat - 2018-10-24 @ 3:51 am

It's interesting that it seems like the adult and young adult collecting community is growing but the kid's toy buying community is shrinking. Or it seems that way to me anyways. I still think TRU could have stayed in business if they made better business decisions and were in better touch with their customers. Then maybe all these people wouldn't be put out of work. 

EvilHayato - 2018-10-23 @ 4:04 pm

This is never good news. The aftermath of TRUs destruction is trickling down the pipeline. Hopefully the whole news of TRU resurrecting into a new entity will help get things back in order, but im skeptical. 

sXeblues - 2018-10-23 @ 2:38 pm

And thus, the scarcity of product on store shelves will only continue, all the while the same will probably become more and more apparent in the online market. And all of those people are now out of a job, to boot. Just dandy. ?

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