This past holiday season was rough for several companies that anime fans are familiar with. Will this be a temporary setback for these chains, or is this part of a deeper downward spiral for them?
First up is an unsurprising one: Barnes & Noble. The new CEO, James Daunt, said the chain had “a pretty awful Christmas”. Daunt didn’t want to make changes at the end of the year nor invest much in old plans. If you are a regular Barnes & Noble shopper, you might have noticed their low-effort attempts to woo shoppers. Some of their usual Black Friday deals were MIA, Manga Mondays were — and are — still missing, and most coupons are only 10-15% off, often requiring a minimum purchase. We still have to see what the strategy is to turn around the bookstore, but if shoppers get used to skipping Barnes & Noble as a place to go, it’s going to be very hard to lure them back.
Another unsurprising name on this list is GameStop. The video game store’s struggles have been well-documented due to pressure from the competition, digital sales booming, and slowing hardware sales despite the strong showing from the Switch. As a result, holiday sales were down about 25% from a year ago. That’s a pretty significant drop, and it wasn’t like last year’s numbers were great.
At least two credit agencies have recently downgraded GameStop’s rating. That means they see trouble for GameStop for the near-future. If the PlayStation 5 and the Xbox Series X don’t perform well this Christmas, their credit may be lowered even further, making the current $4-or-so stock price even riskier.
Speaking of stocks, another company recently had their shares drop from about $15 to around $9 after weak holiday sales: Funko. Funko is the company behind the POP line of figures as well as other merchandise. They’ve released plenty of anime- and game-related figures, even partnering with companies like Hot Topic and GameStop for exclusives. But holiday sales were disappointing for the company.
As ICv2 described, Funko’s results showed “substantial sales declines, a writedown of inventory overstock, and a surprising loss for the quarter”. So people weren’t buying collectibles, and that caused a backup which reduced the value of their merchandise. According to ICv2, GameStop is Funko’s closest partner, and so GameStop’s struggles were also passed down to Funko. I also don’t find this surprising considering there are so many different figures out now. Yes, you are bound to find something you like, but it also leads to analysis paralysis (aka which one do you choose?!). Its Q3 has some good news, so a lackluster Q4 isn’t a complete cause for alarm for Funko.
Other chains that had disappointing holiday seasons include mass merchandisers Walmart and Target along with department stores Kohl’s and J.C.Penney.
So did everyone have a terrible holiday season? No. The biggest winner was Amazon, likely due to its fast shipping and range of merchandise. Even beyond Amazon, online dominated and were the reason for most of the holiday sales growths.
Online has the convenience, the allure of free shipping, and low prices to tempt consumers. But other factors that may have led to retailers’ struggles include:
- The shortest possible shopping season between Thanksgiving and Christmas
- Frozen II merchandise sales being lower than expected
- Toys sales overall declining as more kids want electronics and gift cards become a popular alternative to traditional gifts
- The decline of malls
Some of these issues won’t be a factor this year, but yet 2020 has its own challenges. The coronavirus outbreak has led to cancellation of events like Sony at PAX East while the Animal Crossing Switch console has been delayed in Japan and perhaps elsewhere. Politics in the US will also likely cause tension and unease for the rest of the year and perhaps beyond.
Regardless of whether you think the overall economy is strong or weak, anime, manga, and game fans will need to keep a close eye on retailers. Even if you are normally an Amazon or other online shopper, everything has a ripple effect — and some of these are directly connected. Like, what if the coronavirus outbreak continues and ends up causing Sony’s and Microsoft’s new consoles to be pushed back until 2021? That could spell disaster for GameStop, who is heavily relying on next-gen hardware to lift sales. And since collectibles have been a bright spot for both GameStop and Barnes & Noble, if Funko has to raise prices due to slacking sales or cut back on production, that’s going to affect shoppers’ buying habits.
But Funko still isn’t in dire financial straits, and Barnes & Noble has an experienced CEO ready to fully take the helm and use his strategies so that next holiday season will be better. GameStop…well, I’m sure this won’t be the last time I’ll be talking about GameStop. Not much of a battle plan, waiting months to bet on products that may or may not be a hit, heavy focus on tech trade-ins…yeah, I’ll be talking about them again, and there’s a good chance that the news could even be worse than their holiday sales report.