State of the Industry Q&A 2026: Jonathan Cathe...

A buyer base starved for 40 years got here out to get pleasure from and have fun the brand new launch of M.A.S.Okay. It was a giant D2C and dotcom play for us. Individuals are stoked, psyched, and it’s Christmas morning 1985 another time. Individuals are additionally psyched on My Pet Monster. Had a few manufacturing runs that offered out shortly. We’re stoked for what’s to come back. Additionally, we’re refocusing on owned manufacturers … writing and designing our personal tales, characters, and motifs. We’re trying good on launching in 2026, however the gadgets have been born in 2025.

I believe all the things at retail is nostalgia — Star Wars, G.I. Joe, Jurassic Park, Transformers, LEGO, Barbie. What’s on the market that hasn’t been round for greater than 40 years? However in that Island of Misfit Toys lane of nostalgia, the toy trade, writ massive, remains to be rife with competitors. There are some good gamers on the market.

The true problem is that the venues are shrinking. There are fewer and fewer retailers the place , correct assertion or marketing campaign may be launched. On the similar time, IP is consolidating beneath 4 or 5 studios with most well-liked companions which were in place for many years, so the alternatives are slim. You must be sharp to wedge your means in.

Stay nimble, have just a little swagger, be able to do the track and dance, keep hungry, and are available to compete. You’ve acquired to promote your self and your capabilities. TLS has completed job of that, however not with the intention of being the corporate that resurrects and dusts off previous IP from the basement or attic toy chest. Our focus additionally isn’t to be the commodity, import/export, plastic-and-plush-by-the-pound guys. We wish to be toymakers, creatives, and good storytellers.

We be sure that our gadgets have that shine, that the tales are relatable, and that folks can join. If the merchandise are good and the IP resonates, then we’ll get the time of day. That’s the only focus. That’s the magic: Is the IP hitting, and are the merchandise good? For those who marry the 2, you need to have some success.

The first step is getting the gatekeepers — the retail patrons — to provide the previous “You shall cross!” If that occurs, carry your A-game. Be certain the product is nice, and ensure the IP stakeholders are speaking to retail and making it identified why their manufacturers deserve shelf house. There’s solely a lot magic a toy firm can do; the IP house owners need to step up, too.

However yeah — a great deal of competitors, plenty of of us chasing the identical carrot, slicensing.

Nothing on the manufacturing facet is actually altering — toys are nonetheless too customized, too nuanced. There’s no main sign that almost all toys are shifting to full automation. Perhaps you get a NERF dart or a COG off an automatic line, however the bulk of it’s nonetheless hand-processed.

The place innovation has proven up is on the design finish. AI helps groups get throughout the end line quicker — whipping out decks, colour codes, STL recordsdata, engineering options, displays, you title it. It’s undoubtedly dashing up workflows and slicing improvement time in half in some instances.

However we’re in 2026, and nothing in toys is reasonable. Labor prices are going up. Uncooked supplies are going up. Something with nuanced meeting and heavy ornament stays costly. Deco is the place a number of the automation is creeping in — direct-to-surface print tech, tender PVC foam processes that simplify runs, and even tampo has taken on a extra automated really feel (although it nonetheless wants an artisan’s contact).
On the finish of the day, the provision recreation remains to be amount, amount, amount. Nothing crushes pricing higher than limiting the deco hits and stacking a mega opening order. That’s the “innovation”: pay the provider — rather a lot.

Truthfully, query for Nick [Mowbray] over at ZURU. They’re vertical, they’re looking for automation, and he’s acquired that tech-brain. I’m only a surfer/skater/punker/artist from Laguna Seaside who ended up proudly owning a toy firm. The ZURU bros are out right here 3D printing homes, so who is aware of — perhaps one in every of their machines will bust out a flying Buzz Lightyear that lights sparklers and strafes the canine from 20 toes within the air. However who truly needs that?

“Pew pew pew” remains to be cool. With old school deco, haha.

Exterior of blaster darts? I haven’t seen true automation scale. On this enterprise, “water slide” nonetheless counts as innovation.

IP diversification is actually about self-reliance. Licensing is just too costly, and the economics are getting aggressive. Even the blokes who haven’t rolled out their cute little bear in 40 years are abruptly asking for double-digit participation. It’s gotten just a little ridiculous, just a little uncontrolled. Tariffs and added prices imply everybody’s taking extra money out of the system besides the producer — and in some unspecified time in the future, that has to level-set.

There are good companions, although, and that’s the place the actual technique begins. The first step: select licensors and collaborators who share your imaginative and prescient and are prepared to roll up their sleeves. Step two: when you’re licensing, be sure that the story truly issues, connects, and that it has a cause to exist. Step three: Choose licensors who will often present up at retail and make the case for why these things issues, and that there are clients able to seize all the things the associate procures. And step 4: simply inform the reality. If the product is a truth-teller, folks reply. If it’s a “wannabe poser,” you get diminishing returns.

I believe confirmed winners are typically tales rooted in pleasure, creativeness, and primary truths. It doesn’t matter if the IP is 100 years previous or three days previous — when you’re telling the reality in a deep means, you get to play. If not, you journey the pine.

And when you’re toymaker, likelihood is you have already got tales and experiences you wish to share — tales that resonate. That’s the longer term. Licensing is stale in lots of locations, and IP consolidation throughout 4 or 5 main studios hasn’t helped. Sooner or later, you must belief that the tales you wish to inform are literally fairly superior. In the event that they hit primary truths, they’re arduous to drown out.

Pop Mart is a superb instance: bizarre, collectible, cute, [people] completely get it. Simply being its true self — and it really works.

One of many largest challenges for toy and collectibles retailers proper now could be staleness. Cabinets get caught on the identical junk, the identical secure bets. TLS solves that in a couple of alternative ways — via format, dimension, worth level, IP, and just a little FOMO. We make actually nice merchandise, and even a splash of one thing apart from the Massive “D” diversifies the assortment and offers folks a cause to go to. A retailer stuffed with nice gadgets sells nice gadgets, and we put ourselves in that blend.

However the actual problem for retailers is danger. How far do you lean in? Who’s the viewers? What does your buyer’s cart appear to be? What’s their max spend? How do you stability informal customers vs. hardcore followers? Are you able to make your retailer a vacation spot, an authority? How a lot does it price to function that part? What’s the dollars-per-square-inch return? And essentially the most existential query: is there one thing extra helpful that ought to occupy this shelf?

TLS solutions these questions with white house alternatives, sharp worth factors, and bang in your buck — extra expertise for the {dollars} you pay. We carry beloved manufacturers, high quality procurement, advertising and marketing assist, a gross sales staff that wishes to personal the relationships and supply white-glove service, best-in-class inventive and product improvement, a decent SKU providing with trending codecs, and tales/IP that hit emotionally. We’re an answer as a result of we’re not simply suppliers — we’re tastemakers and trendsetters. Typically, to a fault, TLS exhibits up early. We have been doing blind bins 16 years in the past — now they’re in every single place. We hold our finger on the heart beat and use that perception to assist enhance our companions’ companies, placing extra money of their pockets as a result of the gadgets we procure resonate with clients who wish to take part in TLS merchandise.

Retail cabinets are aggressive — capital C aggressive. There’s a wave of Disney movies incoming, Pokémon is hitting its thirtieth anniversary, and a few behemoths like Spider-Man and Avengers are going to suck plenty of oxygen out of the room. However we’ve acquired sturdy playing cards on the desk too: Starvation Video games (Thanksgiving film), Indignant Birds 3 (Christmas film), Palworld (hit online game), My Pet Monster (who doesn’t love this?), Popples (similar query!), M.A.S.Okay., plus some owned manufacturers we’ll be revealing quickly.

It’s not straightforward, however when you’re bringing worth, bringing high quality, and also you’re intersecting with the zeitgeist tendencies, you’ve acquired an actual shot. From the seems of it, we’re going to have stable enterprise this yr with Walmart, Goal, Amazon, specialty, and the impartial ma-and-pa channels.
Collectors is a troublesome class as effectively. It’s tribal. Folks have already got their favourite corporations like soccer groups, and in the event that they don’t know you, it’s a really chilly first handshake. TLS is intersecting with different types and codecs by way of M.A.S.Okay., My Pet Monster, and so forth. That crowd calls you to the carpet quick. They’re not straightforward to please, however you must keep steadfast in your decisions and observe that unmoving north star: deal with the very best procurement potential. Make nice toys.

And the toy enterprise itself? It’s arduous. No large field Toys “R” Us, no KB, no Sears, no J.C. Penney, no Finest, no Montgomery Ward. The chance to showcase a correct collection of toys is getting smaller and smaller. Walmart and Goal are grocery and attire shops with a couple of toy cabinets — they’re not toy shops. The massive 5 studios have many of the licensing locked up, LEGO has its simple gravitational pull, and the mathematics will get tight. COVID-19, tariffs, shrinking cabinets, consolidation — it’s like Zeus throwing lightning bolts nonstop.

However right here’s the factor: TLS has reached a spot that solely about 0.005% of American companies ever attain. Meaning, via our existence and expertise, folks worth what we carry to the desk: expertise, creativity, ardour, will, drive, focus, know-how, expertise, and the unshakeable have to compete. So long as we keep centered, nimble, and open, clients can have the chance to boogie with us — and that outlook is fairly f’in candy.

LFG!