The holiday season is so crucial for Toys ‘R’ Us that the toy mega-chain made sure to file for Chapter 11 bankruptcy well before the shopping season kicks off, yet promised not to close any stores before the end of that crucial season. However, in its quarterly earnings report, Hasbro, the country’s second-largest toymaker, says that the retailer’s bankruptcy will affect its own earnings for the rest of this year. How badly will the Toys R Us bankruptcy affect the holiday season?
While Hasbro — the company behind Nerf, G.I. Joe, Transformers, Monopoly, My Little Pony, and much more — did turn a profit in the third quarter of 2017, and its overall sales are up, the manufacturer is nevertheless blaming Toys ‘R’ Us for negatively affecting Hasbro’s bottom line.
“As a result of the Toys ‘R’ Us bankruptcy filing in the U.S. and Canada, there was a negative impact on our quarterly revenues and operating profit,” chairman and chief executive Brian Goldner said in a statement.
Though Hasbro is blame-shaming Toys ‘R’ Us, it also has a significant interest in helping keep the kid-targeted retailer afloat — and not just because Toys ‘R’ Us owes Hasbro $59 million.
Hasbro and the other large toy companies still rely on Toys ‘R’ Us and other retailers of its ilk, where families can shop for wide varieties of toys and gifts in person. Even though discount retailers like Walmart, and online giants like Amazon, might have slightly lower prices, they rarely offer the selection and experience of a genuine toy store.
For now, allowing Toys ‘R’ Us to not go out of business means taking a temporary hit until the retailer is able to finish the holiday season, pay what bills it can, and get through store-closing sales that may hurt Hasbro’s sales at other retailers. Deadline Hollywood reports that the toymaker expects to see sales to increase significantly when the new Star Wars franchise film out at the end of this year hits home video.
The above was first reported by The Consumerist.