Will FAO Schwarz make Target a bigger player in toys?
Target, showing no intention of ceding ground in the toys category this holiday season, announced a new collaboration with FAO Schwarz and the introduction of its largest Bullseye’s Top Toys list ever.
The FAO Schwarz collaboration includes a 70-piece toy collection available exclusively at Target. FAO Schwarz’s New York City flagship, which reopened under new owners at Rockefeller Center in 2018, will carry the collection along with more than 300 of Target’s exclusive brands, including Cat & Jack kids apparel and Pillowfort home collections.
The Bullseye’s Top Toys list this year includes 50 of the “most anticipated toys,” up from 32 last year, among them 19 exclusives from brands like Disney, L.O.L. Surprise! and LEGO. Target said in a statement, “With deals starting this month, guests will find incredible value, with prices starting at just $20.”
Brian Cornell has prioritized baby as one of Target’s growth categories since taking over as CEO in 2015, and the company significantly expanded its investments in toys in 2018 after Toys “R” Us’ liquidation. Last year, Target opened 25 Disney branded in-store shops ahead of the holiday season and have added more in 2020.
Toys have seen strong momentum this year, driven by home quarantining. The NPD Group reported toy sales in the U.S. climbed 16 percent in the first half, with particular strength in outdoor toys and board games.
Target’s push in toys came despite some analyst concerns about the discounter facing heightened competition from Amazon or Walmart in the generally low-margin category. In early September, Walmart announced its 32 hot-toys list and Amazon.com presented a selection of 100 “Toys We Love.” Amazon this year replaced Target as the fulfillment provider for toysrus.com.
In the holiday season 2019, Target saw toys, as well as electronics and some parts of its home business, underperform. Mr. Cornell said on Target’s Q419 analyst call in early March, “As we focus on key items next year, we want to make sure we’re buying to the depth required to make sure that we meet the demand in the marketplace during the holiday season.”
- Target Introduces Exclusive FAO Schwarz Collection and Largest Top Toys List Ever – Target
- Target joins forces with FAO Schwarz for holiday season toy domination – Yahoo Finance
- Target Corp (TGT) Q4 2019 Earnings Call Transcript – The Motley Fool
- Will Santa be bringing as many toys this holiday? – RetailWire
- Why is Target helping Toys “R” Us get back online? – RetailWire
DISCUSSION QUESTIONS: Is the toy category more or less important to retail holiday success this year compared to Christmas seasons in recent years? Is Target positioning itself to have success in the category over the holiday selling period?