The coronavirus, which has closed factories and design offices across China, could mean fewer seasonal toys on store shelves this spring and summer, and fewer toy launches this fall, toy makers say and industry experts gathered this week for the 117e Annual New York Toy Fair.
Toymakers that rely on Chinese manufacturing said they hope factories will return to normal soon, but there is still too much uncertainty about the outbreak to predict the impact.
âFactories are doing everything they can to get back up and running, but that is changing every day,â said Steve Pasierb, president and CEO of The Toy Association, the trade group that hosts the annual fair. âSome factories have reopened and then closed again. ”
The fact that factory closures took place in the first quarter, the slowest time of the year for toy sales, mitigated some of the impact, but if production lines do not resume Soon at full speed, manufacturers and retailers could find themselves scrambling to meet demand.
âIf it lasts longer than a month to 45 days, that’s a problem,â Pasierb said.
Hasbro and Mattel both warned investors this month that they expect their first quarter results to suffer from the outbreak. Both companies also said the blow would be softened by the fact that the first quarter is their smallest quarter of revenue.
Isaac Larian, CEO of MGA Entertainment, maker of the hugely popular LOL Surprise collectible toys, said he was concerned the ripple effect of global supply chain closures could worsen the impact.
âIt’s a global economic disaster,â Larian said. âIt will hit markets and retail starting in May due to the delay in shipping the supply chain. The world must come together now and find a cure. It is not just a Chinese problem. Now is not the time to be blind and nationalist.
Peter Cummings, director of toy company Zing, is also concerned about what he calls “the supply chain trickle effect.”
âIndustries everywhere are quite afraid of the impact,â he said.
Even companies that have already relocated manufacturing outside of China have said they are affected because factories they use in countries like Vietnam or Thailand are busy with work being sent from unused Chinese factories.
The Toy Association canceled the Chinese pavilion at the fair on Feb.3, where 40 Chinese companies were scheduled to display their toys.
Several toy makers at the fair said the virus, which has closed factories and offices across China, quarantined workers and restricted movement, is delaying the development of new products they hope to launch later. during this year.
Anna Mowbray, director and COO of Zuru, maker of Rainbocorns, 5 Surprise Mini Brands and other bestsellers, said she had to postpone one of the company’s launches to fall 2020, because virus outages reduced the time required for the product. development work.
âThe shipping and selling window for the fall is pretty short and we’ve just lost six weeks of that window,â Mowbray said.
The factories Zuru works with are reopening and starting shipping goods again, she said, but are still understaffed, with only about half of their normal workforce back on duty.
Davin Sufer, chief technology officer at WowWee, which won the Toy of the Year license and the plush toy of the year for its Baby Shark toys, said it was the time of year when the The company would generally work on finalizing products to be released later. during this year. Closures and travel bans have slowed down this work.
“For the fall, we will have to hurry a bit to catch up,” he said. “It should be pretty achievable provided we don’t see more shutdowns causing delays.”
Oregon-based company Hog Wild Toys finds itself in the position of having its new spring and summer toy lines already in its U.S. warehouses, thanks to an unintentionally lucky production shift, at a time when some retailers scramble to replace blocked toy orders in China.
Josh Loerzel, vice president of sales and marketing for Hog Wild, said he recently received an email from one of the major US toy retailers saying, âWe have supply issues, who are having problems. full warehouses? “
Loerzel said the shortage of outdoor toys has resulted in increased demand from retailers for its new activity games, Birdie Golf, Curve Ball and Pop and Pass.
Pasierb said coronavirus fears haven’t stopped U.S. toy buyers and sellers from attending the fair, which is expected to attract more than 25,000 visitors by the end of Tuesday.
Hand sanitizer dispensers were prominently displayed at nearly every exhibition booth at the show, but Pasierb said it was typical of every New York toy show.
âThis show takes place every year during the height of flu season,â he said. “This is the Purell show.”