One week before Thanksgiving, FAO Schwarz’s signature toy soldiers will stand at the ready to ring in the holiday season. Three years after closing its Manhattan flagship store, the iconic toy seller is back in New York City -- complete with more than 20,000 square feet of toys, games and dolls.
Of course, FAO’s new location in Rockefeller Center isn’t the only place you can pick up its piano dance mat or a model bumper car set. At Macy’s in downtown Washington, FAO-branded toys were piled high in a holiday display that was up weeks before Halloween. Stationed between the Godiva chocolates and the Martha Stewart enameled cast iron pans were neat stacks of 30-piece motorized train sets, 75-piece wooden castles, plush tigers and more.
So goes the story of the first holiday season without one of the largest names in American toy history: Toys R Us. Some toy makers are debuting new stores this fall and building partnerships with other chains. At the same time, retailers and discount stores are expanding their wares. In the wake of Toys R Us' demise, for example, Ollie’s Bargain Outlet bought nearly $200 million of toys from suppliers left with excess inventory. Ollie’s plans to sell them at “up to 75 percent off the fancy stores' price.”
Put together, the calculus seems simple: Now that Toys R Us has faded away, retailers don’t want to miss an opportunity to sell shoppers a pink tea party set as they peruse queen fitted sheets, ‘scratch and dent appliances’ or even a gallon of milk.
“Department stores, food and drug stores, electronic video game stores, the discounters, the dollar stores, even the mom and pop shops should pick up a little bit,” said Juli Lennett, The NPD Group’s senior vice president and industry adviser for toys. “Everybody’s going to get a piece of the pie.”
A piece, that is, of the $3.3 billion U.S. toy market. Retailers of all kinds are kicking into high gear. On Tuesday, Target announced nearly a quarter-million square feet of new spaces for toys in more than 500 stores, as well as remodeled toy departments in more than 100 stores. Also this week, Amazon announced its full holiday toy list -- its largest yet -- featuring more than 1,400 toys and games. Walmart said in August that it was broadening its in-store toy assortment by 30 percent in all locations, with 40 percent more toys available online. (Amazon founder Jeff Bezos also owns The Washington Post.)
Mark Tritton, Target’s executive vice president and chief merchandising officer, said on Tuesday that Target had seen the most growth in toy sales specifically at locations near old Toys R Us stores.
“When we saw the exit of Toys R Us, we saw this was a huge opportunity and we wanted to prepare for it,” Tritton said. “We didn’t want [shoppers] to feel frustrated about having one less place to shop this season.”
Analysts described Target, Amazon and Walmart as the “big three” toy sellers heading into the holidays. But less conventional names are in the game, too. Buzzfeed, the media company, is opening a toy store in New York City. Michaels, the arts and crafts retailer, is stocking hundreds of do-it-yourself crafts and exclusive products. Party City debuted about 50 Toy City stores in tandem with its pop-up Halloween shops, and department stores Kohl’s and J.C. Penney have said they plan to expand their toy selections, too. Even grocery stores are stocking more toys.
Looking for a mini firetruck by the flu medicine? Or Cabbage Patch Kids propped up beside actual cabbage? You should be in luck.
Tim Hall, chief executive of the analytics start-up Simporter and a former Hasbro executive, said Walmart, Target and Amazon in particular will continue to lock in customers with their sophisticated and expansive websites. And even though other toy sellers may carry an emotional connection that echoes that of Toys R Us, that may not be enough to compete with the e-commerce giants. In the fourth quarter of 2017, about 27 percent of toy sales were online -- higher than the rest of the year -- according to the NPD group.
“There was this $11 billion jump ball," Hall said, “and I think the guys that jumped the highest were Amazon, Walmart and Target." (Toys R U had more than $11 billion in revenue in its last fiscal year.)
Still, if Toys R Us left behind a void, it may suddenly be too cramped, said Neil Saunders, managing director of GlobalData Retail. With so many new players rushing to stock the latest games and gadgets, Saunders wonders how those companies will make toy sales part of their long-term strategy -- or not.
“I think the other players you’ve got, they’re much more opportunistic,” Saunders said. “It’s just about trying to flex.”