Hasbro CEO Brian Goldner spoke to CNBC and Yahoo Finance yesterday, regarding the future of the company. Among the discussion points was the mitigation and contingency plan for the eventual US tariff increase to be imposed to toys manufactured in China.
As a temporary solution Hasbro is planning to pass-on the price increase to the customer and therefore safeguading the retailers.
“We’re having conversations with our retailers and of course we will pass along those costs.”
The company hopes to “effectively pass on those costs” by mitigating the margin internally. But “ultimately, [they] will be borne by the consumer over time.”
In long term, Hasbro is planning to make changes to the products to reduce the cost.
“With time, you can redesign and redevelop your product lines with those tariffs in mind…“
Hasbro is taking action to shift as much production out of China to other countries as possible ahead of this holiday season. About 67% of Hasbro’s merchandise is now sourced from China, down from 90% a few years back and 75% or so entering 2019. By the end of 2020, Goldner expects to have only 50% of Hasbro’s inventory reliant on China.
However, the toy giant is not planning to raise toy prices for the 2019 Holiday Season.
“We certainly want to ensure that we’re not raising prices on products right before the holidays. We would hope we would continue to have a productive dialogue and find other solutions to the situation.”
Increased tariffs will effect from December 15th onward.
