Excess Inventory Still Poses A Major Concern For The Industry

Industry officials said that despite the new products at the show, there are still concerns about overstock, with inventory pressure in the U.S. outpacing that of the U.K., and Europe as a whole.

Concerned about inflation and the war in Ukraine, European retailers slowed their orders in mid-2022, while U.S. retailers' orders continued into the fall.

To clear inventory, U.S. retailers are expected to make massive price cuts in the first half of 2023, said Jay Foreman, CEO of Basic Fun. Despite the strong performance of the U.S. market in the first eight months of 2022, sales fell sharply in the very important fourth quarter, building up inventory and increasing pressure on dealers.

Foreman said bluntly, "Sales are expected to be flat or down this year, obviously because channel players are under pressure to clear their inventories. Both big-name manufacturers and retailers have serious inventory backlogs. Goods will depreciate in value over time, and retailers need to cut prices to clear out. The question is what about manufacturers? How long can their cash flow withstand the pressure on inventory? It's hard to say."