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Virtual Toy Chest's
News Archive

December 29, 2004

As reported on National Public Radio, the Lionel Train Company has filed for bankruptcy. In their heyday they were one of the major producers of toys in the United States. In recent years they have struggled along with the rest of the toy industry to compete with video games.

Lionel Trains have been synonymous with Christmas for more than one hundred years. In many a house a Lionel train would faithfully circle the Christmas tree. A whistle would announce its appearance around the bend, while puffs of smoke could be seen rising from the locomotive. Before you take down your tree this season consider setting up a train. Hopefully this great company can be put back on track with sales from children who grew up on Brio and Geo Trax.

December 29, 2004

It has been a fairly slow holiday season for the toy industry. Most companies had lackluster sales. There were a few series that bucked the trend. Amongst these were Playamates' Teenage Mutant Ninja Turtles and Fisher Price's Little People. Ban Dai's Teen Titans kept the season from being a total disaster. Toy Biz tried to ride out the season on their popular Marvel Legends figures, and the fading Lord of the Rings items. Mattel's major sellers were MegaMan NT Warrior, and, of course, Barbie. Unfortunately, G.I. Joe did not have a very happy christmas. This may be due in part to its second class placement in many stores. The sales of Star Wars toys were also slow. This is unfortunate, as some of their figures that were being offered at the $5.00 price point are quite good.

December 29, 2004

Most of the major retailers are having after Christmas sales. Wal Mart is featuring a 25% discount on select toys. These include the TMNT Lair, Power Rangers Jumbo Megazords, Mighty Beanz, and miscellaneous radio controlled vehicles. Target was offering a similar discount on 12" Star Wars figures, a Speed Stars track, and radio controlled vehicles. The alternative stores, such as Big Lots and Rite Aid have already cleared out their merchandise.

May 26, 2004

Yesterday, The New York Times reported that Toys "R" Us filed a contract infringement suit against after negotiations through a mediator failed to produce a satisfactory resolution. The suit centers around an August 2000 conract between the two companies that states that Toys "R" Us would pay $50 million per annum for the next ten years for the right to be the exclusive retailer of certain products on Amazon's site. Toys "R" Us claims that Amazon has broken the contract by allowing other merchants to sell certain products on its site. Toys "R" Us also disputes Amazon's use of advertisements by Google that offer toys from competing merchants.

This story brings up the subject of the changing nature of the retail industry. The ten year vision of commerce that the contract embodies is clearly not sustainable even after only five years. According to the New York Times, Toys "R" Us lost $18 million on the contract last year. Amazon, on the other hand, is in competition with e-Bay. Amazon has tried to offer a similar service by allowing individuals to sell on their site. They are also trying to maximize their profits through advertisements. However, Toys "R" Us claims that the execution of this change in business strategy violates their contract. Consumers primary interest is price. This is evident in Wal Marts success in the industry. On the internet consumers can find the retailer that offers a particular product at the lowest cost. Thus, paying large sums of money for a desirable location on the internet, such as Amazons site, is not a good business decision. Retailers like Toys "R" Us must offer consumers other reasons to purchase products from them. Exclusive offerings are one such reason. Another would be to have a loyalty card program.

In the future the retail business may simply be bypassed by the manufacturers. They are already shipping items to distributers and retailers, they could just as well ship them to consumers. At this point I suppose that they do not want to deal with the problem of 'unsellable' stock. Even this should not be too much of a problem in that most retailers donate their excess merchandise to charity.

January 15, 2004

Sad news on the retail front as two giants of the industry file for Chapter 11 bankruptcy protection. KB Toys, the nation's fourth largest toy retailer, filed for protection yesterday. F.A.O. Schwarz, the nation's oldest toy retailer, filed for protection last December. It looks as though these stores will follow other retailers such as Caldor and Ames who could not compete with the giant box stores Wal-Mart and Target.

F.A.O. Inc., the parent company of F.A.O. Schwarz, has already started to close its Zany Brainy and Right Start stores. Many of the F.A.O. Schwarz stores will also close. It reamins to be seen what will happen to the landmark Fifth Avenue store. KB Toys has announced plans to close as many as 400 of its stores. The KB closings will leave many malls without toy stores as Toy R Us closed its Imaginarium stores this past year. Given the poor business environment, it remains to be seen whether or not another company will open toy stores in malls.

This will undoubtably have a bad effect on the toy industry. Much of KB Toys' debts are to toy manufactuers, who will lose out under the bankruptcy laws. The cost will eventually be passed on to consumers. Further, with fewer large retailers, the toy manufacturers will probably produce fewer toys. Some series will probably not even go into production.

January 14, 2004

The post holiday discounts are still going strong. Toys 'R' Us has a great selection of Major Powers on discount. The figures are only $3.98. They also have Looney Tunes figures for the same price. More notably, they still have a good selection of older toys from two or more years ago. Some of these include Xyber 9, Boglins, and others. The presense of the older stock reminded me of toy stores in the 80s.

KB Toys and Toy Works are clearing out Max Steel and Zoids in their brick and mortar stores. They have some hard to find items from these series at good prices. They also have some old stock around including S.U.M.O. Wrestlers, and Men in Black II amongst other series.

Target is continuing to reduce the prices on its holiday toys. Unicron is being closed out at $21.98 at some locations just as the new energon Unicron is arriving. Other bargins include Star Wars Speeder Bike with 12" Leia for $12.99, and Zoids Gojulas Giga for $24.98.

Wal Mart seemed to have its biggest sales prior to the holidays. Some locations still have Spy Troops four packs for about $10.00. There are also some He-Man figures for about $5.00. I guess their slogan says it all, "Always low prices!"

Other stores that normally stock toys only for the holidays have pretty much cleared out their stock. I did happen to find some great generic figures still around at a local pharmacy.

Thats all from the retail front. Take this opportunity to get your hands on these toys at great prices, they won't be there for ever.

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