Toy Sellers Relish 2008 Christmas Prospects
Toy sellers and manufacturers are bullish on the current economy. This is a great time, they said Wednesday, to be selling toys, and not cars, furniture, or cashmere sweaters.
Executives from the country’s top toy companies were as giddy as kids in a toy store as they gathered for an industry holiday preview in Manhattan, saying they believe they have strong products and a level of consumer demand that is recession-resistant.
“We’re very positive about the season,” said Gerald Storch, chairman and chief executive officer of Toys “R” Us Inc. “Christmas will come, and parents will buy toys for their children.”
Toys showed their resilience in 2007 and will again this year, Storch said.
“Last year was a tough year for most retailers but we had a great year. And I believe we’re going to do fine this year as well,” he said.
Neil Friedman, president of Mattel Brands, said a number of Mattel products are already reporting strong sales, including Elmo Live, a $59.99 plush doll that moves, responds to sounds, and tells jokes. “We see a lot of things that are selling nicely, which is hopefully a good indication of things to come,” Friedman said.
Friedman and Storch were among the industry executives who gathered for a holiday toy preview organized by Jim Silver and Chris Byrne, independent toy analysts and the editors of a new toy ratings Web site, timetoplaymag.com.
In 2007, a series of recalls contributed to a sales drop of 2.4 percent to $22.3 billion, according to Port Washington, N.Y.-based research firm The NPD Group Inc. This year, there have been no major toy recalls, however, high gasoline and food prices and economic uncertainty have made parents watch their discretionary spending. Toy sales are down 1 percent for the first half of this year, according to NPD.
This year there have been only minor toy recalls that attracted little attention.
“The safety problem is a thing of the past,” Silver said, adding that initiatives by the industry and the Consumer Product Safety Commission have addressed the problems that led to last year’s recalls.
Tougher safety standards, however, could make it harder to re-stock bestsellersthat disappear from the shelves in the weeks before Christmas, Silver said. Toys made in China now require additional time because of the new standards.
Silver said those delays could actually benefit Toys “R” Us, which aggressively purchased the expected bestsellers, and is more likely to have toys still in stock when other stores run out.
Toys “R” Us is coming off two Christmases in which it posted its best results in recent years. In 2006, holiday sales at stores open at least a year rose 4.1 percent, the company’s best performance since 1997. Last year, sales rose 3.1 percent during the holiday season, despite numerous recalls and a slowing economy.
