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Toys “R” Us Explores Possible Bankruptcy Filing

According to multiple sources, Toys “R” Us hired lawyers at Kirkland & Ellis to help restructure its roughly $400 million in debt due in 2018. Sources say the retailer’s options include potentially filing for bankruptcy protection.
The company already announced it is working with Lazard to help address its debt load, and it successfully refinanced some of its debt just a year ago.
"As we previously discussed on our first quarter earnings call, Toys “R” Us is evaluating a range of alternatives to address our 2018 debt maturities, which may include the possibility of obtaining additional financing," Toys “R” Us spokeswoman Amy von Walter said in a statement. "We expect to provide an update about these activities, as well as the many initiatives underway to provide an outstanding customer experience in our global retail locations and webstore during the holiday season, during our second quarter earnings call."
Toys “R” Us will have its second-quarter earnings call on Tuesday, Sept. 26.
 
Like most of the toy industry, Toys “R” Us relies heavily on fourth quarter sales to sustain its business, and last year’s holiday sales were down 3.4 percent from the previous holiday season. Many in the industry blame “The Amazon Effect” and low price points at mass retailers such as Walmart for declining sales.
 
Toys “R” Us recently announced it will open a pop-up shop in Times Square this holiday season.

LEGO to Cut Workforce by 8 Percent Amid Revenue Decline

LEGO says it will lay off 8 percent of its staff and revamp its business after reporting fiscal results for the first half ending June 30. Revenue for the period declined 5 percent, compared with the first half of 2016. The layoffs would impact approximately 1,400 positions, the majority before the end of 2017. Currently, the LEGO Group employs approximately 18,200 people.

Performance across market regions was mixed. In established markets—such as the U.S. and parts of Europe—revenue declined, while in some growing markets, such as China, revenue grew by double digits.

Operating profit was down 6 percent compared with the same period in 2016. This was due to lower revenue and increased costs associated with investments in production capacity and organizational capabilities made to support higher expectations of revenue that failed to materialize.

During the first half of the year, some of the best-performing themes for the company were homegrown classics such as LEGO City, LEGO Friends, LEGO Duplo, and LEGO Technic, while The LEGO Batman Movie products also saw a great response from consumers, according to the company.

Goliath Acquires JAX

Goliath recently acquired JAX Ltd. Inc. JAX will continue to operate out of Plymouth, Minn. Cindy, Kreg, and Debbie Levine will remain in their leadership roles. JAX will continue to produce its own products and maintain its brand, while utilizing Goliath’s global resources, including R&D, logistics, and marketing.

Sony Appoints Jazwares as Master Toy Partner for Hotel Transylvania

Sony Pictures Consumer Products named Jazwares as master toy partner for Hotel Transylvania. Additionally, Simon & Schuster Children’s Group, Papercutz Comics, and Bendon Publishing will create books inspired by the film franchise and new TV series. Both categories will anchor the global licensing program, which will have cross-category representation.

Jazwares’ toy line will be based on new and classic characters from the franchise and will hit shelves next summer leading up to the release of Hotel Transylvania 3.

Additionally, a new computer-animated short, Puppy, features characters from Hotel Transylvania and debuted in theaters worldwide this summer before The Emoji Movie. Hotel Transylvania 3 will debut next July, and will mark the first time the characters venture outside of the hotel after Mavis surprises Dracula with a family voyage on a luxury Monster Cruise Ship.
The TV series premiered on Disney Channel this summer and follows Mavis’ teenage years. The series is produced by Nelvana and Sony Pictures Animation, and new episodes air Sundays on Disney Channel. 

Spin Master Announces Second Annual Hatchimals Day

Spin Master Corp. announced the next introduction in the Hatchimals Franchise, Hatchimals Surprise, which has fans guessing “Who Will You Hatch” next?

Hatchimals Surprise are different from any Hatchimals seen before, according to Spin Master. The company says kids can look forward to a bonding experience that continues to evolve, featuring new eggs, a new hatching process, new species to meet, and a big surprise on Hatchimals Day, Friday, Oct. 6.

Hatchimals Surprise is already a contender for numerous toy awards, following the debut of—and demand for—Hatchimals in 2016. The public will be able to guess the surprise of this newest iteration in the Hatchimals franchise before they are made available at major retailers and on spinmaster.com beginning on Oct. 6.

Pre-order will be available beginning Sept. 18 across all major retailers, with MSRP set at $69.99. Visit hatchimals.com for updates.

Toy Industry Foundation Collecting Donations for Hurricane Harvey Victims

The Toy Industry Foundation’s Toy Bank is collecting toys to distribute to victims of Hurricane Harvey. If you have product or excess inventory to donate, fill out this TIF form, then email it back to thetoybank@toyindustryfoundation.org.
 
In addition, the Spirit of Liberty Foundation is currently accepting funds, toy donations, and volunteers to help with its “Operation Christmas Miracle—The Believe in Santa Tour” and “Santa’s Traveling Workshop” to bring gifts to displaced families in Texas and Louisiana this holiday season. For information on how you can help, please contact Richard H. Rovsek, (858) 759-2000, rr@spiritoflibertyfoundation.com.

September 7, 2017
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