November 29, 2021

"The Toy Intelligencer Toy Stock Index" is up +3% (November 26, 2021, vs. October 26, 2021).


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China Imposes a 7 Week Quarantine on Newly Arriving Ships


"In its attempts to keep the virus out, China’s continued to prohibit crew changes for foreign crew and recently imposed as much as a seven-week mandatory quarantine for returning Chinese seafarers. Even vessels that have refreshed their crew elsewhere have to wait two weeks before they’re allowed to port in China."


Supply-Chain Crisis Only Getting Worse With China's 7-Week Port Quarantine,” Bloomberg


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It's the end of "Everything for $1" at Dollar Tree. The new price? $1.25


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The U.S. is getting back into the chip manufacturing business. Samsung is building a $17 billion chip factory in Texas. That's a good thing. According to the Wall Street Journal.


"[Currently] about three-quarters of global semiconductor production capacity sits in just four Asian locations: Taiwan, South Korea, China and Japan, according to the Semiconductor Industry Association. The U.S. represents just 13%."


More Chips Will Be Made in America Amid a Global Spending Surge,” Wall Street Journal


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The Airbnb of Warehousing


Check out Chunker. It works by putting those who need warehouse space in touch with those who have available warehouse space.


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"Retail sales of toys continue to be strong; we estimate retail up +15% y/y so far in 4Q. We think the first half of 4Q has been aided by a solid economy, government stimulus, an early Hanukkah, and consumer fears of sellouts owing to widespread media coverage of the ongoing supply issues. It’s been our belief that retail growth in the back half of 4Q could turn negative y/y, owing to a pull-forward of demand as well as out-of-stocks of desired products."


"A growing concern within the toy industry is what happens to the goods that are still backed up in the supply chain and don't make it to store shelves in time for Christmas. The bear case is that these goods will clog the retail channel in 1Q, requiring markdowns, liquidations, or the suppression of first half (or perhaps even holiday 2022) orders. The bull case is that the purchasing activity continues well past Christmas. We tend to agree with the bull case."


Gerrick Johnson, BMO Capital Markets