US: Goldman Sachs warns of toy industry slump

Investment bankers change industry rating from 'neutral' to 'cautious'.
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Toy profits are at risk from smartphone and tablet games – that’s according to the latest research from no-scruples investment firm Goldman Sachs, which has downgraded the industry to a ‘cautious’ rating.

The ratings are designed to inform potential investment decisions.

Board games and puzzles are considered the most vulnerable. Sachs downgraded games specialist Hasbro’s shares from ‘neutral’ to ‘sell’ while certain companies whose portfolios were less reliant on games’ shares were kept at ‘neutral’, including Mattel.

Of course, the decline of the North American and European markets was also to blame. ‘Sachs said toy companies would have to increase their shares in emerging international markets.

‘Sachs analyst Michael Kelter said: "The nominal amount spent on traditional toys/games in the US per capita is down 30 per cent from $85 per person to $60 per person since 1998, and the pace of the decline has accelerated to five per cent to ten per cent, year to date."

[Source: USA Today]

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