Toy & Hobby Stores
Companies in this industry operate physical retail stores that sell new toys, games, and hobby and craft supplies; some also sell products online. Major companies include GameStop, Michaels, Hobby Lobby, and AC Moore Arts & Crafts (all based in the US), as well as Citta del Sole (Italy), Hamleys (UK), LEGO Group (Denmark), and Toyworld (Australia).
The global toy market generates about $90 billion in annual revenue, according to the NPD Group. The US is the world's largest toy market. Toy sales increased in Mexico, Russia, and Brazil during 2018, while the UK, Australia, France, and Spain saw declining sales, NPD reports.
The US toy and hobby store industry includes about 8,250 stores with combined annual revenue of about $16 billion.
Competition from big-box retailers (notably Walmart and Target), growing online toy sales, and changes in the way children play in the Digital Age are posing challenges to traditional toy retailers. Toy and hobby stores compete with multiple retailers offering similar products, including mass merchandisers, consumer electronics stores, and fabric and sewing goods stores. Brick-and-mortar toy stores are losing market share to online toy retailers that offer lower prices and fast or free shipping.
Consumer spending is a key driver of demand for toy and hobby stores. In addition, population growth among young children (under 12) drives demand for toy stores, and population growth among women 35 and older drives demand for hobby stores. The profitability of individual companies depends on the ability to generate store traffic and effective merchandising. Large companies offer wide selections and deep discounts. Small companies can compete effectively by offering specialized products, providing superior customer service, or serving a local market.
Many of the toys and games sold in the US are imported, primarily from manufacturers in Asia. China, Vietnam, and Indonesia are major sources of US toy and game imports, as is Mexico. Trade tensions, including the Trump administration's threat to place tariffs on some $300 billion of Chinese imports -- including all finished toys -- is a cause of concern for toy sellers.
Products, Operations & Technology
Major products include toys (30% of sales), craft supplies (15%), kitchenware and home furnishings (15%), games (6%), and sewing supplies (4%). Other products
Sales & Marketing
Finance & Regulation
Regional & International Issues
Also includes the following chapters:
Quarterly Industry Update
Trends and Opportunities
Call Preparation Questions
Glossary of Acronyms