Supply Chain Research

The biggest issue for the toy industry’s supply chain this year hasn’t been meeting demand for the hottest toy (that’s Fingerlings as we’ll show later) but rather dealing with the Chapter 11 bankruptcy filing of Toys’R’Us. Panjiva data shows that it had accelerated its imports up until September, with U.S. seaborne imports that month having risen 12.4% on a year earlier.

Subsequently it has crashed however as many manufacturers withdraw support. Imports in October and November fell by 23% and 22% respectively. That still meant, however, that Toys’R’Us’s imports only fell by 7.8% for the peak July-to-November season in total.

Chart segments U.S. seaborne imports by Toys’R’Us by month. Source: Panjiva

Nonetheless, it is not as if underlying demand has been significant. Total imports across all manufacturers and categories were unchanged in November on a year earlier. As a result the value of imports across the holiday season (July to November) rose by just 1.7% to $8.21 billion.

Chart segments value of U.S. imports of toys by country of origin. Latest month based on seaborne shipments only. Source: Panjiva

The lackluster performance of the sector broadly was likely one of the reasons Hasbro approached Mattel regarding a merger or acquisition, as outlined in Panjiva research of November 13. While both have significantly increased imports through the import season overall – by 7.8% for Mattel and 8.7% for Hasbro – both have slowed down more recently. Indeed, Mattel’s imports in November slumped 8.2% on a year earlier. That may suggest it was more “Toys’r’Us” exposed than Hasbro.

Chart compares U.S. seaborne imports where Mattel and Hasbro are a counter-party. Source: Panjiva

Industry consolidation and financial struggles won’t won’t stop Santa delivering the most eagerly awaited toys however. In 2016 the top toy, Hatchimals, suffered from a lack of availability after a surge in demand exhausted imports that had started late and then peaked in September.

In 2017 “ Hatchimals Surprise” manufacturer SpinMaster has delivered later in the season as before but instead peaked in October. Supplies also increased to 1,280 TEUs from 907 TEUs for the 2016 edition. The leading toy by volume though has been Fingerlings, for which 1,907 TEUs have been imported with a fairly constant level of supplies from mid July onwards.

Chart segments U.S. toy imports by brand keyword. Source: Panjiva