Last Christmas was anything but merry in the world of toys, when a devastating price war unfolded that would soon alter the competitive landscape of the entire industry. First, Wal-Mart
The fallout lasted well into the new year, as inventory liquidations at those two chains took a toll on first-quarter results at Toys "R" Us
Times have been so bleak lately that Toys "R" Us has revealed possible plans to do the unthinkable -- auction off its core toy business to focus on the more profitable Babies "R" Us chain. Nevertheless, while market share has slipped at the hands of Wal-Mart, Target
The company's staunchest allies just might be the toy manufacturers themselves, and several months ago it approached many of them seeking help. Obviously, toy suppliers have a vested interest in helping Toys "R" Us succeed. Not only does the company control a second-best 17% share of the domestic market, but also it has traditionally been more favorable than discounters, in terms of pricing and selection. Without Toys "R" Us, manufacturers would be more reliant on Wal-Mart, and none want to be solely subjected to the demands of a behemoth well-known for driving down suppliers' prices.
So the suppliers have answered the call, with companies such as Mattel
Toys "R" Us is like a marquee baseball player in his last season before free agency -- anxious to showcase his talents to impress whomever will be writing his next paycheck. Personally, I would rather see the company redouble efforts to turn around its toy business rather than surrender. However, if selling proves to be the best course of action, a successful holiday season will ensure that a larger number is ultimately written on the price tag.
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Fool contributor Nathan Slaughter owns none of the companies mentioned.