Hasbro Asking Retailers to Take Inventory Early

Toy maker Hasbro, trying to get in front of container shipping capacity shortages, is suggesting retailers should take products early this fall to avoid problems getting goods to consumer markets.

But the company says it also is securing additional containers and vessel space to ensure capacity as the busiest part of the peak shipping season begins.

“We’re doing everything to avoid the problems,” David Hargreaves, chief operating officer, told investment analysts on a conference call Monday.

“We’ve put additional container capacity in place and shipping capacity in place, and I think we’re encouraging our retailers to take the product earlier rather than later,” he said.

By The Numbers: U.S.Trade with Mainland China.

Toy makers are among the many shippers that have reported being squeezed this year by tight vessel capacity out of Asia. Logistics industry officials say retailers have been pressing some smaller suppliers to hold inventory longer and manage the transport on their own, straining some trans-Pacific supply chains.

Rhode Island-based Hasbro, whose brands include Playskool and Transformers toys, outsources 80 to 85 percent of its manufacturing to vendors in China and so is a major capacity buyer in trans-Pacific trade.

The company has kept its stocks relatively lean this year, with inventories down 1.3 percent in its fiscal second quarter ending June 27 while sales fell 7 percent from a year ago to $737.8 million.

But Hasbro says it has new products in the pipeline for the second half of the year and is working to ensure those goods get to retail outlets for the fall, and is encouraging retailers to take on more of that inventory.

Hargreaves said Hasbro is telling retailers, “‘You need to not leave it to the last minute -- and maybe put a little bit more ahead than you otherwise would have.’ I think they’re ready, they understand the situation. They import a lot themselves.”

“Given what we’ve done and given that we’re working together with the retailers, we do not anticipate that this is a material issue,” he said.