• Sammy Claus is coming to town Sammy Claus is coming to town NORTH POLE — Troubled toy maker Santa Claus, Inc., (NYSE: XMAS) Tuesday announced that had filed for Chapter 11 bankruptcy protection, the latest victim of the retailing
• Sammy Claus is coming to town
Sammy Claus is coming to town
NORTH POLE — Troubled toy maker Santa Claus, Inc., (NYSE: XMAS) Tuesday announced that had filed for Chapter 11 bankruptcy protection, the latest victim of the retailing juggernaut that is Wal-Mart, Inc.
Santa N. Claus, XMAS chairman and CEO, said his 2,000-year-old firm would lay off 2,500 workers at its North Pole toy factory. Mr. Claus said manufacturing would be shifted to factories in China and Korea.
Claus also announced the liquidation of “certain livestock assets,” specifically, eight tiny reindeer working in XMAS’ delivery operations. “We can’t afford on-time delivery any more,” Claus said bitterly, “not when Wal-Mart has people coming to 4,300 stores around the world to pick the stuff up for themselves.”
The action by XMAS follows the announcement last week that the upscale FAO Schwarz toy company had sought bankruptcy protection. In November, Toys “R” Us, the $11 billion toy chain, announced a $38 million third-quarter loss, closed 182 stores and laid off 3,000 workers.
Over the last year, FAO Schwarz has closed its Zany Brainy stores, and Toys “R” Us has closed 146 Kids “R” Us clothing stores and its Imaginarium toy stores. Toys “R” Us shares have dropped 73 percent to around $11.75 in the past decade.
Not coincidentally, in the past decade Wal-Mart has more than doubled its share of the nation’s annual $25 billion toy business. Nearly one in every four dollars spent on toys in the United States goes to Wal-Mart.
Claus explained, “Take your Hokey Pokey Elmo, the ‘it’ toy for this year. Wal-Mart is selling Hokey Pokey Elmo at $19.46. That’s 30 percent under list and about what it costs me to make it. They sell toys at low margin and make it up on volume. Plus they use toys as loss leaders, getting people into their stores and selling them other stuff while they’re there. I don’t sell tires and groceries, and besides, the delivery costs would kill me. Man doesn’t live on milk and cookies alone, you know.”
Economists predicted that competing with Wal-Mart would make Claus’ operation more efficient. “Wal-Mart is the greatest thing that ever happened to low-income Americans,” W. Michael Cox, chief economist of the Federal Reserve Bank of Dallas, told The New York Times. “They can stretch their dollars and afford things they otherwise couldn’t.”
Meanwhile, at Wal-Mart headquarters in Bentonville, Ark., a company spokesman said the firm would soon debut “Sammy Claus,” a Christmas mascot modeled on the company’s late founder, Sam Walton. “Sammy Claus and his trusty bird dog, Roy, will fly through the air in a magic bass boat pulled by an old pickup truck,” the spokesman said. “Sammy Claus will wear a blue vest, and instead of ‘Ho, ho, ho,’ he’ll be saying, ‘Low, low, low.'”
Informed that Sammy Claus would soon be coming to town, Santa Claus was philosophical. “I guess I can get a job as a greeter at Wal-Mart.”
St. Louis Post-Dispatch
