Hasbro’s factories in China could be greatly affected by the coronavirus — with industry experts predicting “shortages on a litany of toys,” including merchandise featuring Baby Yoda from The Mandalorian — should the outbreak get worse.
“If things aren’t normal by the time June and July roll around, there will be shortages,” explained Jim Silver, CEO of the toy review site TTPM.com, in an interview with CNN Business.
Silver said sources inside the Chinese factories have told him that people are on edge and in fear of a major breakdown in production. Hasbro is reportedly worried that it could run low on materials to make the toys, since most of them come from places in China where work has been stymied due to the virus.
“There was difficulty in obtaining some of these raw materials or the same quantity they want to get,” Silver said. He expects there to be production declines ranging between 5% and 10% as a result of the outbreak. However, Hasbro insists that it is “close to being able to ship what they originally projected.” They confirmed the coronavirus concerns in an email to CNN.
“We are working to mitigate the impact of our manufacturing partner factories being closed longer than anticipated, as well as to reschedule the shipments we have not been able to make,” said Hasbro CFO Deborah Thomas.
A regulatory filing made last week by Hasbro said that the quarantines and travel restrictions that were in place because of the coronavirus had prevented workers from reporting to the Chinese factories and assembling the toys. The company added that it "could have a significant negative impact on our revenues, profitability and business."
Disney’s decision to hold off on Baby Yoda merchandise until after the show finished airing seems to be backfiring yet again.
Pre-orders for the most of the character’s toys and collectibles, including Hasbro’s $59.99 animatronic plush doll, sold out in less than a day. They were scheduled to start hitting shelves over the next few months, but the coronavirus could now complicate things.
Hasbro has said that it is "working to mitigate the impact" of the deadly disease and hopes to eventually move production outside of China to avoid similar situations in the future.
"In the next couple of years [we] will be about 50% out of China," said Hasbro Chief Operating Officer John Frascotti.
Created by Jon Favreau, The Mandalorian stars Pedro Pascal, Gina Carano, Carl Weathers, Giancarlo Esposito, Emily Swallow, Omid Abtahi, Werner Herzog and Nick Nolte. The entire first season is available to stream on Disney+. Season 2 will premiere in October.