Hasbro really, really needs you to buy ‘Frozen 2’ and ‘Star Wars’ toys this holiday season

Two of Disney’s most successful movie franchises are about to hit theaters again, and toymaker Hasbro needs people to buy as many toys, figurines and games as they can to gain lost ground this holiday season.

“Frozen 2” slides into theaters nationwide on Friday, and “Star Wars: Rise of Skywalker” will unleash the force on movie screens one more time December 19. They couldn’t come at a more pivotal time for both Hasbro and the toy industry.

Six years ago, Disney and Hasbro, which is licensed to make Disney’s “Frozen”, Marvel, “Star Wars” and “Disney Princesses” franchise-related toys, were caught flat-footed by the demand for “Frozen” merchandise after the first film hit theaters during the 2013 holiday season and enjoyed major box office success. To date, the first “Frozen” movie has earned more than $1.2 billion worldwide, making it the highest grossing animated film of all time.

At the time of the movie’s release, the supply of Elsa, Anna and Olaf-related merchandise at stores like Toys “R” Us failed to meet unanticipated demand, which has lasted years, according to BMO Capital Markets toy industry analyst Gerrick Johnson.

“No one expected ‘Frozen’ to be as large as it was,” Johnson told CNN Business. “That caused a sellout of product in 2013. It really took them all of 2014 to catch up with demand. They actually sold more ‘Frozen’-related merchandise in year two than year one.”

Hasbro and Disney have looked forward to the release of “Frozen 2” and the latest Star Wars film “Rise of Skywalker” for years, hoping the popular franchises will boost lagging sales following a lackluster 2018 holiday season fueled in part by the lack of a Star Wars movie in theaters and the first holiday season without Toys “R” Us. The former king of US toy retailers filed for bankruptcy in September 2017 and shuttered all its stores by July 2018 before announcing its relaunch earlier this year.

But early sales figures show this holiday season looks like another bad one for most major retailers. Hasbro products that are not licensed by Disney are now expected to perform poorly as well, according to Johnson. The 2019 shopping season between Thanksgiving and Christmas has six fewer days than last year because Thanksgiving falls so late on the November calendar this year.

That makes the success of Disney toys all the more crucial for Hasbro.

“So far sales in the toy industry have been slow. They have been underperforming to this point if we say the beginning of the season is September,” Johnson said. “Each day that goes by we’re more dependent on a post-Thanksgiving sales rush.”

Trade war trouble

President Trump’s trade war with China has also had a negative effect on both Hasbro and the larger toy industry.

Prior to its bankruptcy, Toys “R” Us enjoyed a 15% share of the US toy market, according to a report from wealth management firm DA Davidson & Co. Other retailers, including Macy’s, Kohl’s and even Party City, tried to pick up the toy slack in Toys “R” Us’ absence last holiday season, but Walmart, Target, and Amazon enjoyed most of the revenue gains along with independent mom-and-pop specialty stores.This year, most of those retailers have cut back on their toy lineups largely because of concerns over tariffs on Chinese imports, according to Davidson & Co. toy industry analyst Linda Bolton Weiser.

“Because of the uncertainty over the tariffs, the retailers were hesitant to buy,” Weiser told CNN Business. “This is the second Christmas without Toys ‘R’ Us. We thought everything would be smooth. It really is not because oft the tariff stuff that’s going on.”

China manufactured two-thirds of Hasbro’s products prior to 2019. The company has been forced to foot the bill for most of its own Chinese shipping this fall as a result of the tariff concerns while shifting its supply chain to domestic sources, according to Weiser.

Pinning hopes on Disney

“Frozen 2” merchandise has been the one toy product line retailers have been willing to stock up on, Weiser said.

“They know it’s going to be a big phenomena so they’ve prepared for it,” Weiser continued. “It’s been so many years since the last movie that the girls who were three to four-year-old girls back can enjoy it in a nostalgic sense in addition to the three to four-year-olds now, so you’re going to get a double whammy.”

“Frozen 2” toys may be expected to sell well, but Disney appears to have missed a big opportunity to sell a bunch of “baby Yoda” Star Wars toys to boost its holiday toy sale numbers. The cute green alien’s debut at the end of episode one of the new Disney Plus series “The Mandalorian” was a pleasant surprise for many Star Wars fans. Director Jon Favreau told Collider he convinced Disney and Lucasfilm not to make or release any baby Yoda toys before Mandolorian started streaming in early November to avoid spoiling the surprise.

“I have to thank Disney and Lucasfilm, because the way the cat usually gets out of the bag with that stuff is merchandising and toy catalogs and things like that. So they really back us up,” Favreau told Collider.

The sale of Star Wars toys has been underwhelming since the release of the divisive “Last Jedi” in December 2017, according to Johnson, who said a combination of “movie fatigue” and poor fan reception are to blame.

“If there was fatigue two years ago, there’s more fatigue now,” Johnson added. “However, the Mandalorian, the baby Yoda, that’s generating a lot of interest and excitement. I know some the fans on the last episodic movie were very upset with the movie. There were people who really disliked that movie so much that they swore off all Star Wars ever again. I’ve heard that. … If Hasbro can get a product out for baby Yoda, that will help.”

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