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BMO Capital Markets Analyst Gerrick Johnson on the factors causing the decline in toy sales this year.
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Very much let's talk about for more holiday sales in particular.
Ice BMO capital markets analyst -- Johnson is here with us today.
-- why he considers this the worst season for toy sales in over thirty years that's quite a statement -- having backed that up as far back as we go did we have data we have data going back thirty years this is the worst your -- change we've had in toys cells.
Down about three to 4% some grand scheme of things not so bad if that's the worst -- -- way.
That's including recession strike yes so this is this is actually down lower than it would be if we were in a recession that now.
They questioned why what's going on my kids have to be here for the show makes me very happy but I know I nature they'd brought their iPad with them.
Offensive that they would be out of -- high had to -- deal and I -- stand that this is cannibalizing the traditional twin market.
It's in a certain way.
It's a big problem for the for the toy makers this year definitely.
That there's a lot of things going on there there's not a lot of new Newser excitement into industry this year a lot of the more fun exciting toys.
Would have -- Shelton and put in delayed delayed cycle here so what do we got that's how right now.
Teenage mutant ninja turtles that -- things like that what's all this -- there's not a lot of -- to creativity.
Because he's toymakers have been very defensive -- -- so.
Woody and buzz like here really aren't something here in the latest Toy Story movie -- now you have tablets coming along and and and there's not a lot of traditional -- -- -- -- -- -- I should mention by -- -- your kids are pretty job.
How old are your kids almost six and almost point six but they know are -- -- you have six and four year old three using ipads right now because their apps for every age category there are right now but what happens in tears from all these -- -- -- -- turnaround anymore so that's I think that I -- -- cyclical it's a new way to play hand held games we've had an audience for 3040 years.
It's just a different way its novel it's exciting -- what about the games industry itself video games industry -- how are they doing now.
Why don't I don't technically cover video games for the package software guys -- had a tough time with this new way to play video -- -- Again for my personal experience I know the Disney princesses very popular all of that toys derive from movie characters wreck it Ralph huge presence of Toys 'R' Us this here.
That's not generating strong sales.
Not not really not really if if if you think of the movies we've had over the last couple years time.
Iron Man two you know Toy Story 3 or four what are we on right now so a lot of a lot of sequels a lot of toys accuser to have -- Spiderman -- we need.
To have each -- missiles -- areas in and my my kids are too old for this but I've I've read up about there there are new Disney shows and there's one the dock.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- But even as some famous people can't get Ahold of these things so there there are some sectors are due out some individual -- health care clinic that's outperforming.
Well we have an outperform rating on the -- and -- Mattel makes Barbie as you know hot wheels.
Hello things that are working better than others some nice new products like monster high for example and LeapFrog is right there with the tablets.
They have leap pad to that is a -- tablet you can throw this tablet cross through the still -- -- place that.
You have to imagine be brain trust the creative forces in -- toy companies have to be looking at these trends.
And trying to figure out how to bring back the traditional toy or to find the next hottest biggest tickle me -- -- for Elmo for B what have you -- any -- insight on the R&D if you will -- Yeah outlet like I said earlier you know that -- lead times about a year and a half for two years so.
Think guys are thinking about things for this year two years ago and their posts and well we can do this it might be little expensive metaphorical put it aside we'll stick with what works what we know.
And unfortunately.
What works -- we know was born -- -- -- board well they must have learned from this experience I mean we're not this is repeated next here we'll we'll we'll see better towards next June -- -- great -- senator thank you very much appreciate your insights.
