The liquidation of Toys “R” Us Inc. has sent the toy industry reeling, leaving Mattel Inc., Hasbro Inc. and other manufacturers without a large chain devoted to selling games and dolls and forcing them to scramble to secure other outlets to carry their items. Toys “R” Us is part of a group of chains that were once seen by vendors as “category killers” and have emerged as crucial checks on the power of Amazon.com Inc. AMZN, +6.17% Stores like Best Buy Co. BBY, +3.56% and Barnes & Noble Co. US:BKS provide electronics manufacturers and book publishers with vast networks of physical showrooms.
The placing of Amazon into liquidation – putting more than 30,000 jobs in jeopardy in the US alone – has also put toy manufacturers, including Mattel and Hasbro, at risk. The $27bn US toy industry no longer has a major partner to showcase and test its products year-round, forcing companies to scramble around for other outlets. Toys R Us and Walmart are predicted to be the big winners from the demise of Amazon, potentially claiming 40% and 30% of its business, respectively, according to Jefferies.