by Doug Desjardins
The holiday season is important to retailers but vital to toy retailers, who generate about 40% of their annual sales in November and December. And for the first time in several years, they’re looking forward to happy holidays.
Though analysts haven’t released specific sales projections for toys, they’re expected to be part of a modest overall increase. The National Retail Federation is expecting holiday sales to increase 2.3%, while the International Council of Shopping Centers (ICSC) is projecting a more ambitious 3.5 percent increase.
Toy retailers and manufacturers are hoping to reverse two consecutive years of declining sales. According to the NPD Group, sales fell 3 percent in 2008 and were down less than 1 percent in 2009 at $21.6 billion.
One good sign for toy sales is the Toys “R” Us announcement that it will hire 45,000 seasonal employees for the holiday season, the largest wave of hiring since 2006. Toys “R” Us said 35,000 workers will staff its standard stores with the other 10,000 operating its temporary pop-up stores.
After opening 90 pop-up stores last year, Toys “R” Us plans to open 600 this year. The Toys “R” Us Express stores are small outlets located mainly in shopping malls that carry a limited selection of the more popular toys and games. The company is also rolling them out in Canada with plans to open 30 stores.
Toy giants Hasbro and Mattel are also looking forward to stronger holiday toy sales based on encouraging third quarter results.
Hasbro reported a 3-percent increase in third-quarter sales of $1.3 billion and a 3% increase in profit of $155 million. In an Oct. 18 conference call with analysts, Hasbro CEO Brian Goldner said the company has most of its holiday toy inventory in place at retail for what Hasbro hopes will be a “strong fourth quarter for sales.”
Top toy manufacturer Mattel reported similar results. It generated a 2-percent increase in sales of $1.83 billion for its third quarter and a 23% jump in profit of $283 million. Sales were driven by an encouraging 6-percent increase in sales of Barbie dolls, an area where sales had been slipping in recent years.
Mattel CEO Bob Eckert said there were “still some challenges ahead” for the holiday season and predicted consumers would follow a year-long trend of shopping late into the season.
“Retailers remain guarded with inventories and several are betting on a late holiday season this year,” said Eckert. “So, anticipating the question I’m most often asked during this time of year; yes, there will be a Christmas and Mattel toys will be under the tree and we’ll likely sell more toys than anyone else. But I suspect it’ll play out later than we’re accustomed to.”
Resources
Toy Industry Sales Stabilized as Economy Continued to Struggle
Toys R Us Plans to Hire 45,000 Holiday Season Workers
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