Considering Implications For Hasbro And Mattel From The Toys 'R' Us Bankruptcy


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Toys "R" Us officially filed for

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Chapter 11 bankruptcy reorganization in a move that shouldn't come as a surprise, as it has been speculated for a while that the retailer was struggling with its debt obligation.Under the new plan, Toys "R" Us has secured around $3 billion of debtor-in-possession financing, Wells Fargo's Timothy Conder commented in a brief research report. Top priority for the toy retailer is to continue accessing products from key vendors such as

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Mattel, Inc. (NASDAQ:MAT) and Hasbro, Inc. (NASDAQ:HAS) ahead of the key holiday shopping season.

Toys "R" Us accounted for 11 percent of Mattel's total sales and 9 percent of Hasbro's total sales in 2016, the analyst noted. As vendors, Mattel accounted for 5 percent of Toys "R" Us' recent fiscal year sales and Hasbro accounted for 4 percent.

Looking forward, the bankruptcy procedures will better allow Toys "R" Us to maintain access to products from key vendors and also minimize unsecured losses to Hasbro and Mattel in the near term, Conder continued (see his track record here). Of particular note, both Mattel and Hasbro aren't strangers to this situation and faced similar scenarios when Target exited Canada.

"During these transitions wholesale shipments are impacted, but distribution is quickly absorbed by other retail clients," the analyst wrote. "We expect the near-term Toys 'R' Us industry disruption could be less than feared as other competitors step in to pick up additional share."

Related Links:Lego To Cut Jobs As First Half-Yearly Sales Decline In A Decade Rattles The Danish ToymakerAfter 5 Years, Mattel's Top Line Returns To Growth; Q4 Guided Higher Than Average

27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.


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