Date: Monday, November 30, 2020
Source: New York Post
Santa Claus is facing a suspense show getting toys delivered this holiday season — and the drama is coming out of Los Angeles.
Some of the hottest toys this year — from LOL Surprise dolls to Tonka trucks — are languishing in shipping containers at big ports in Southern California, with delays loading them onto trucks spurring doubts that they’ll make it to retailers in time for Christmas, The Post has learned.
Executives at MGA Entertainment, which makes the LOL dolls and accessories, are calling shipping companies every day to check on the status of 700 containers that have been sitting at the ports of Los Angeles and Long Beach, California, for more than a month, said MGA Chief Executive Isaac Larian.
As a result of the logistics snafu, only 60 percent of major retail chains’ stores nationwide have enough MGA toys in stock right now compared with the 98 percent retailers typically have at this time of year, according to Larian.
“Our toys should be in Walmart, Target, Kohl’s, you name it,” Larian told The Post. “Retailers are calling us every day because they don’t have enough of our products.”
The California bottleneck — which appears to be mainly hitting smaller and mid-size toy manufacturers — has been partly spurred by a shortage of trucks and truck drivers during the pandemic, as well as a shortage of loading equipment and labor at the ports this fall. Couple that with soaring demand for toys that has persisted since the spring as parents desperately search for ways to keep kids occupied as many schools and workplaces remain shuttered.
“There are challenges across the board in getting products here, and once it’s here getting it to retail,” said Richard Gottlieb, head of Global Toy Experts.
Classic toys including Lincoln Logs, Care Bears, Lite-Brite sets and Tonka trucks are at risk of running out before Christmas, says Jay Foreman, chief executive of Basic Fun!, the company that makes those brands. In the case of Lincoln Logs, supplies could dry up by mid-December, he said.
Basic Fun!’s merchandise is facing delays of more than a week as it waits to be picked up at the Los Angeles port by truckers, some of whom are sent directly by the retailers and some by Basic Fun! to be shipped to its own warehouses.
“We have scheduled pickups that haven’t happened and this has been going on for at least four weeks,” Foreman said. “Everything is so critical now.”
Earlier this week, Amazon’s site said MGA’s $13 LOL Confetti UnderWraps doll would be available on Dec. 2. The site suggested that shoppers “order it now.” Meanwhile, the LOL Clubhouse Playset, which sells for $49.88 at Walmart.com, is listed as “out of stock.”
A Walmart spokeswoman wasn’t immediately able to comment, but a source close to the retailer said it’s “not uncommon for inventory to be fluid on many gift items during the holiday season.” Contacted by The Post, Amazon officials confirmed this week that LOL Surprise is a popular brand and said the e-tailing giant is working directly with MGA to maximize availability.
Part of the problem is that no one predicted that 2020 would be a banner year for toys or that retailers would be offering deals in October, including Amazon Prime Day. Toy sales are up by more than 19 percent for the first three quarters this year, according to the NPD Group.
Most retailers place their Christmas orders for toys in January and February and fine-tune them along the way. But “if demand is exploding as it has been, you can’t expand your production fast enough,” Foreman said.
It’s not clear whether the largest, publicly held toy companies — namely Mattel and Hasbro — are experiencing inventory problems, according to industry experts.
“It’s more of a problem for the little guys who don’t have the muscle Mattel or Hasbro have,” said BMO Capital Markets analyst Gerrick Johnson.
Hasbro didn’t respond to requests for comment. A Mattel spokeswoman referred to the company’s Oct. 22 earnings call, in which management said its “supply chain is fully operational” amid “low retail inventories” and said it is “working closely with our retail partners on the challenge of meeting the extraordinary growth in consumer demand heading into the holiday season.”
At privately-held MGA, which had sales of $748 million in 2019, according to Dun & Bradstreet, the problems aren’t just limited to the ports or trucking, according to MGA’s Larian.
His Los Angeles-based company owns and operates a factory in Hudson, Ohio, that primarily makes the brand Little Tikes. In November, MGA lost $60 million worth of sales from retailers who canceled their orders from July, August and September because the factory couldn’t make enough product in time for the holidays, Larian said.
The factory is employing just
60 percent of the staff it needs at this time of year.
“This is not the year to wait until the last minute,” toy expert Jim Silver told The Post. “There’s a greater chance you won’t get what you want because there is a slower replenishment system.”