Basic Fun! laid off 18 employees last week in response to the COVID-19 outbreak and its anticipated impact on the global economy. The affected employees worked in multiple departments and represented approximately 10% of the Florida-based toymaker’s global workforce.
The outbreak affected the resumption of production following New Year celebrations in China, where many toymakers focus their manufacturing.
“Certainly production was derailed for most of February, but the factories are slowly getting back up to speed so far in March,” says Basic Fun! CEO Jay Foreman. “We are actually feeling pretty good about how things are getting back online, however the concern is the global economy and the looming health crisis here.”
Basic Fun! was formed in 2017 when children’s consumer products maker The Bridge Direct merged with Canadian toy developer Tech 4 Kids. The company has since acquired the STEM-focused companies Uncle Milton and Geoworld, the construction toyco K’NEX (pictured) and the toymaker Playhut.
Earlier this month, industry events including London Book Fair and MIPTV2020 were cancelled due to concerns around COVID-19 and its spread across Europe and North America.
Additionally, toycos like Spin Master are anticipating declines in fiscal 2020 gross product sales due to supply chain disruptions resulting from the outbreak. Approximately 60% of Spin Master’s goods are produced in China.
“Initially [news of the spread of coronavirus] had a big psychological effect. But I still feel China is the best place to produce toys and will be for the foreseeable future,” Foreman says. “The only thing we know historically is that toys have always been recession-proof. Kids will always have birthdays and Christmas always comes in December. Outside of that, time will tell.”