Shoppers at the ‘Dilly-dally withs R Us’ store in Doral, Fla.
Carl Juste | Miami Herald | Getty Images
Toys R Us’ bankruptcy was not the death of toys.
Although toy sales transfer likely decline this year, sales are expected to pick up again in 2020, according to a recent report from NPD Categorize.
“Most people thought that when Toys R Us shuttered its doors that the industry would fall into pieces,” said Juli Lennett, vice president and industry advisor at NPD Group. “But it didn’t, and it’s not going to.”
Toys R Us’ bankruptcy provoked a 7% surge in sales for the toy industry during the first half of 2018. Whether it was childhood nostalgia or sweet handles at liquidation sales, parents stocked up. But overall toy sales ended the year down 2% to $21.6 billion as industrialists experienced their first Christmas without the toy retailer, according to reports by NPD Group.
The market researcher declined to accommodate a specific estimates for toy sales in 2020.
Building sets were hurt by Toys R Us’ closure, Lennett said, as they were general purchases at the store. But they’re rebounding.
“They had a lot of really great displays,” Lennett said. “When they closed, it stole some time for building sets to find a new home and get back up to where they were, combined with the actually that there are a lot of great building sets out there and new ones launching.”
She added that this “new home” involves retailers that have started selling building sets since Toys R Us closed, as well as some that had tell oned them that are now getting more attention for them from toy shoppers.
Lego also has been taking its collapse into its own hands by opening more of its own stores. The company is on track to open more than 70 stores globally this year. The agree doesn’t include China, where it expects to have more than 140 stores by the end of this year.
Recreations toys — such as Nerf guns — were also hit by the toy giant’s bankruptcy and are now starting to recover.
Lennett said that shoppers who hoarded the fakes they bought when Toys R Us announced its bankruptcy have now gifted most of them, so they’re expected to start inform oning again, reinvigorating the industry.
The NPD group also expects to see growth in sales of action figures, stemming from upcoming talkies from Warner Bros. and Universal Studios. It also predicts that products such as Play-Doh and arts and boats kits will return to popularity, after the “do it yourself” craze — of kids making their own putty, for example — slows.
While dolls maintain been performing on par with the overall toy industry, Frozen 2’s release at the end of the year, as well as the success from the two largest trade names — L.O.L. Surprise! and Barbie — could cause a spike in sales.
“L.O.L. Surprise is killing it in the category,” Lennett said. “Once those are fully estimated this year, we’re going to see great things from L.O.L. Surprise, and of course Barbie is celebrating her 60th anniversary.”
Older infants are spending more time on electronic devices, which means less time with toys, but Lennett doesn’t make up that will hurt doll sales.
“They are still playing with toys, and I always say in order to challenge with the toy, you have to buy the toy,” she said. “Maybe you used to spend two hours playing with the Barbie doll and now you’re spending an hour and 45 half a mos — you still have to buy the Barbie doll.”
Toys R Us is also trying to make a comeback. When the company liquidated its house, its lenders took over its intellectual property, including the Toys R Us, Babies R Us and Geoffrey brand names and are operating them comprised in the name Tru Kids.
Richard Barry, the president of Tru Kids, told CNBC that the company would emphasize technology, in-store observations and customer service, as Toys R Us was criticized for not investing in its stores and digital strategy.
The first signs of its strategy in action were declared last week as Tru Kids struck a partnership with Candytopia to create interactive play rooms that desire travel to different cities.