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After Christmas, the shelves at Dinosaur Farm in South Pasadena often seem barren — the toy store counts on a loyal group of customers who prefer to support local businesses rather than shop at mass retailers. The free gift wrapping service is also hard to pass up.
But this holiday season, owner David Plein stepped up to deliver some of the items well into January.
“I over-ordered thinking I’d get half of what I ordered, which happened last year,” Penn said. “But I’ll be fine.[Sales]was great … the kids are kind of the final frontier. If possible, they are protected from inflation. People may not be able to eat as much at fancy restaurants or buy a nice jacket, but the kids are getting something for Christmas.
According to local toy manufacturers, Dinosaur Farm is the epitome of what’s happening in the toy industry — strong revenues are partially offsetting production problems and promising a strong holiday season.
Back to normal
Nearly three years after the outbreak, “supply transit is getting back to normal,” said Mark Liszt, CEO of Lawrence Warehouse in Vernon.
“Many industries are currently experiencing oversupply,” Liszt added.
“Retailers that lost Christmas sales last year, whether it’s shoes or New York Tech, bought early this year so they didn’t risk what was at the ports and then ended up with too much,” he said.
Publicly traded Mattel Inc. in El Segundo and Jax Pacific Inc. in Santa Monica, both compete with higher inventory levels.
Mattel’s merchandise on hand in the third quarter was $1.09 billion, compared with $854 million in the same period last year, a 27 percent increase, Chief Financial Officer Anthony Silvestro said.
“The increase reflects the higher impact on current production and inflation, partly due to currency translation,” Silvestro told analysts during a recent earnings call. “This position improved meaningfully from last quarter, when inventory increased by $360 million, or 44%, and we expect the trend to continue to improve.”
Jax’s stock stood at $109 million at the end of September, up from $89.7 million at the same time in 2021.
“We had a very good quarter and are now using our inventory domestically and around the world to meet demand for the rest of the year,” Chief Executive Stephen Berman told analysts in October, citing a manufacturing shutdown during the Chinese New Year.
According to Richard Gottlieb, CEO of Global Toy Expert, a New York-based consulting firm, complete sets may be good for sales, but not for profit.
“With full inventory, retailers are less likely to lose sales (because of) being out of stock,” Gottlieb said. “On the other hand, if they carry inventory into the new year, their profits will be hit hard by incurring the costs of getting merchandise out of stores.”
Bruder Toys America Inc., meanwhile, has recently been hit with a slew of merchandise. The Hawthorn-based toy maker, known for its German-made dump trucks and tractors, operates warehouses in New York, Montreal and Los Angeles.
As delays at local ports continued in the first half of the year, Bruder moved all of its cargo shipments to East Coast ports. The move increased shipping costs and lead times, but “it was better to do that than not have the product,” said President Beat Caso, whose grandfather, Paul Bruder, founded the company in 1926.
“When we tried to send containers to Los Angeles, no containers would allow us to go there because of capacity issues with the port,” Caso added. “We said, OK, we’re going to ship everything to New York and supply[the stores]from the New York warehouse. That’s right. Finally, we’re at a good place to accept orders, and we can ship almost all of them.
Increase in sales
The US toy industry’s sales revenue is up 4 percent, to $201 million in the third quarter of 2022, according to The NPD Group.
The performance of the US toy industry continued to surprise us in the third quarter, especially in 2018. After seeing 12 percent growth in the same quarter in 2021 and 22 percent growth in 2020,” said Julie Lennett, NPD’s US toy industry consultant.
Unlike the past two holiday seasons, consumers are expected to continue shopping in person through December.
Mattel said it implemented heavy advertising to boost sales and increase discounts and promotions to balance the year. Another local toymaker in Chatsworth is MGA Entertainment Inc. At a lower price point — around $10 — it’s banking on new products to attract cash-strapped shoppers at mass retailers. Almost half of Jack’s merchandise is priced below $29, so it competes with Jack on that end.
Mattel and Jacks are predicted to end the year with higher earnings — 8% to 10% for Mattel and 20% for Jacks. Bruder’s sale in 2010 It expects the same in 2021, which was a record year for the toy maker.
Plane’s main line on Dinosaur Farm also looks promising.
“Last year was a record for us,” he said. “This year’s is beating it so far.”
Dinosaur Farm doesn’t sell many toys in bulk, so its store is “in direct competition with Target” and other mass retailers.
Consumers are spending more this holiday season, he said, because “things cost more.”
“I pay more and I’m paying more,” Plein said. “What I used to sell for $17, we now sell for $26. And most of the time, I don’t take full marks just because I’m embarrassed about charging that much money.
Bruder Kaso kept commodity prices under control, benefiting in part from the strong dollar.
“We didn’t really increase prices, we had to increase more because we don’t know how things will go this year in terms of shipping costs,” she said. I know many manufacturers have had a lot of price increases.
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