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Will Other Suppliers Suffer After Hasbro Downgrades Holiday Hopes?

October 23, 2017
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As retail continues to decline in the face of online shopping, publicly traded retailers are starting to feel the crunch just as the holidays are approaching.

One such is example is Hasbro who posted earnings this morning. BNN reports that:

The bankruptcy of Toys “R” Us weakened Hasbro Inc’s forecasts for the holiday season in otherwise strong third-quarter results on Monday, boding ill for a sector worried by the collapse of a major customer.

Examples such as these demonstrate the domino effect that failing retailers have on the market. By shrinking the market for the suppliers, the ailing retail market may hurt the industry even more in the coming months.

Read: Massive Debt Sinks Major Toy Retailer, Who Will Benefit?

Investor’s Business Daily reported earlier this month that numerous retailers from William Sonoma to J.Jill were feeling the heat as well, losing as much as 50% of their stock’s value. The declines will likely get even worse as the retail climate worsens.

To matters worse, this comes just as the holiday season is about to get underway. It will be interesting to see how retailers perform come Black Friday in comparison to online vendors such as Amazon. The gap has widened in favour of online sales in recent years and the lower number of stores will likely have an adverse effect on retail’s performance.

Investors should look at their portfolios to ensure that they are not overly exposed to the declining retail sector. As the crisis grows it will begin to encompass more manufacturers such as Hasbro so be sure to consider how vulnerable your investments are to major buyers closing their doors or downsizing.

To read BNN‘s article on Hasbro’s lower holiday sales expectations, click here.

To read Investor’s Business Daily’s report on the retail sector earlier this month, click here.

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