Hasbro CEO, Chris Cocks, has said that US toy prices could rise later this year, particularly if higher tariffs take effect. He was talking to CNN’s Audie Cornish, host of “The Assignment” podcast.
Chris Cocks’ view is that America’s current 30% minimum tariffs on China and apparent agreement to place 20% tariffs on Vietnam’s goods are “pretty significant,” but not unexpected. China and Vietnam are Hasbro’s main international suppliers.
Cocks said on the CNN podcast: “We’ve been around for a while. We take a long-term view of things, and so our general reaction is “be agile, but don’t overreact.”
He continued: “I would expect if prices are going to be raised across the industry, the consumer will probably start to see them in the August through October timeframe, just based on the production timelines associated with toys. Toys typically take three to five months to hit store shelves after a retailer places orders for them.”
“We’ve been around for a while. We take a long-term view of things, and so our general reaction is “be agile, but don’t overreact”
In an NBC report, President Trump responded: “I didn’t hear anything about Hasbro. I don’t care about their prices.” He added in a later comment: “If they make their toys here, if they made their toys here, they wouldn’t have a price increase.”
Cocks said that about half of Hasbro’s products are made in the United States, with the rest manufactured abroad. Over the past few years, Hasbro has shifted production to reduce reliance on China, increasing output in the US, Vietnam, Turkey and India. The company has also increased domestic production of board games in Massachusetts.
Trump has urged companies to manufacture in the US to avoid tariffs, a shift Cocks said is realistic for Hasbro. He pointed to “Magic: The Gathering,” a billion-dollar card game, that is already made in North Carolina and Texas.
Relocating more manufacturing to the United States remains challenging. Labour is a significant cost and, unlike other industries, toys often require fine detailing by hand. That makes automation harder.
Cocks said: “If you took the same toy and manufactured it in the US, labour would make up 80 to 90% of the cost. For consumers, that means a doll sold for $10 now could cost up to $18 to maintain profit margins.”
Hasbro is better positioned than many in the US toy industry to handle the pressure from new tariffs. Its games division is performing strongly and relies less on overseas manufacturing.
Chris Cocks concluded: “Hasbro’s licensing business, which has grown 60% over the past three years, is especially valuable because it brings in pure profit. It just gives us a lot more cushion. I feel more for my toy industry CEO peers than I do necessarily for my day-to-day challenges.”
