Toymaker Basic Fun has filed for Chapter 11 bankruptcy protection as it attempts to restructure after several years of industry volatility.
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The company announced last Friday that it was filing for bankruptcy protection as it faces new financial hurdles that have arisen over the last several years. The company, currently responsible for brands such as Tonka, Care Bears, Lite-Brite, and more, does plan to restructure itself during the process and emerge from the bankruptcy as soon as possible.
Basic Fun CEO Jay Foreman shared some details in a statement to The Toy Book, saying, “To be honest, this business has been humbling many of us from the biggest to the smallest and many like us in between. Toys ‘R’ Us going down, COVID-19, and the supply chain brought many to the brink and some beyond. And some recognized when they needed a little help and some adjusting. Basic Fun needed a little adjusting and that is why we initiated a restructuring on Friday. The fact that this process is done through a bankruptcy court is unfortunate when you are not bankrupt and we are not. We are solvent, capitalized, and open for business.”
To say that the toy industry has been on a roller coaster ride for several years would be an understatement. The close of Toys R’ Us was a blow to everyone at the same time, but then there was some hope as COVID-19 lockdowns spurred toy sales the likes of which had never been seen before. As the companies tried to restock stores, then the supply chain issues hit, and by the time the toys got back to the stores, the demand was gone.
It was a vicious cycle that has put the entire industry in a precarious position.
While it’s never fun to see anyone file for bankruptcy, the strength of Basic Fun’s brands and the stewardship of a CEO who seems to know the exact issues that brought the company to this will go a long way toward righting the ship.
