After four years of increases, U.S. toy sales in 2018 declined 2% from 2017, to $21.6 billion, according to the NPD Group. The drop was attributable, at least in part, to the closure of Toys R Us’s U.S. stores, which researcher IBISWorld estimates had accounted for approximately 14% of U.S. toy sales in 2017.
Not surprisingly, the aftermath of TRU’s shutdown was a frequent topic of conversation at the 2019 New York Toy Fair, which ran February 16–19. Although books represented a relatively small portion of the retailer’s product mix, many trade publishers exhibiting at the show sold into Toys R Us, mostly through Readerlink Distribution Services. They typically did so in limited quantities,
however, and most said the chain’s demise did not have a significant impact on 2018 results.
Generally, publishers recovered lost TRU business by increasing their business with other retailers—notably independent toy stores. Many of the toy store owners roaming Toy Fair said that they were upping their purchases of books, a trend that had begun before the collapse of TRU but has strengthened since, according to several exhibiting publishers.
For companies that publish for the mass market, the potential impact of TRU’s loss was significant. “It was one of our major retail accounts,” said Laura Whitaker, marketing manager, public relations and social media, at Phoenix International Publications. But, she noted, the company’s business was up last year, with sales redirected to other channels, especially trade bookstores. “That’s an avenue we haven’t really paid attention to before,” she added. PI Kids, historically centered on publishing licensed sound books, has recently launched several new and refreshed nonsound titles in standard trim sizes to appeal to bookstores.
Ken Fund, Quarto Group’s chief operating officer, said TRU represented 12% of business for Quarto’s SmartLab division. The company was able to fill the void largely due to its new line of Modo doughs released exclusively through Target.
According to Patty Sullivan, director, retail and business development at Highlights, even though plans to license an exclusive puzzle line with Toys R Us fell through, the company’s book sales continued to grow last year.
Lee Publications, which offers puzzle and activity books packaged with extras such as magnets, stickers, and magic pens, had sold some items into Toys R Us Express pop-up shops. Key accounts manager Stacey Ricci said Lee is looking for new distribution opportunities in service-based outlets, such as chiropractors and orthodontists. “Anywhere kids are waiting and impatient,” she explained. “We all need new ways of looking at our business. There are so many things working against publishing right now.”
A new venture for Sourcebooks has been to create physical versions of some of the titles sold through its Put Me in the Story personalized online book platform, with versions tied to a number of the top boys’ and girls’ names. “The idea is to disrupt the greeting card category,” said Claire Payne, Sourcebooks’ director of sales, mass and special markets. The books are sold on spinner racks, much like the familiar customized mini license plates seen at tourist spots and drugstores.
Forging partnerships with complementary brands—a key objective for many publishers at Toy Fair—can help expand distribution. Melissa Tigges, director of marketing and partnerships for Cottage Door Press, said she was talking to a toy company at the show that could open up opportunities to sell into Whole Foods. “I like having the conversations,” Tigges said. “Everyone here is pretty open-minded about looking for new ways to do things.”
TRU may rise from the grave yet. Geoffrey’s Toy Box, the owner of Toys R Us and related brands, was exhibiting at Toy Fair after reentering the market with a Toys R Us presence in 600 Kroger stores during the holidays. Meanwhile, others are trying to fill the gap left by TRU, such as FAO Schwarz, which has opened a number of stores under its relaunch strategy and was showing an array of its licensed products, and Learning Express, which also had a booth and was talking to independent toy stores about using Learning Express branding.