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December 14, 2018

Toys R Us Closures Cause Waves in the Toy Industry

The announcement of Toys R Us filing for bankruptcy sent shockwaves through the toy industry.  They closed a total of 735 stores nationwide, but not before they slashed the prices on all of their merchandise.  Consumers scrambled to buy up as many toys and children’s products as they could at these low prices.

“A significant amount of children’s products were sold at extremely low prices throughout the first half of 2018, flooding the market and thereby reducing price points,” says Jim Miller, president of Simplay3 Co.  Simplay Co. makes ride on toys for children.

With many storefronts losing money to online companies, Toys R Us going under was not much of a surprise to experts, like Robert Gottlieb.  

“The United States has been over-stored for years and part of the reason for bankruptcies and store closings is therefore due to too many bricks and mortar locations for the number of consumers,” says Gottlieb

Due to the low prices of toy merchandise, many domestic toy companies saw a drop in sales, including Mattel, Hasbro, and JAKKS Pacific Inc., to name just a few.  

Toys R Us closing its doors meant job losses for many people overseas, as well.  700 hundred employees lost their jobs in Australia, and all 105 stores shut down in the United Kingdom.  

Despite the farewell of Toys R Us, many experts believe that this will only lead to an increase in online commerce for toy purchases.  

“We are seeing an accelerating shift to online toy purchasing by consumers. We believe the absence of Toys R Us has definitely impacted this,” Simplay3’s Miller said.

“Time does not seem to be on the side of bricks and mortar retailers as the current and coming generations of shoppers are extremely comfortable shopping online and see driving to the store and not finding what they want to be a waste of time and resources,” Gottlieb wrote.

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