Toy Maker Hasbro is Moving Out of China

Hasbro is moving out of China and according to the company’s CEO, it is going “very well for us.”

Hasbro’s CEO Brian Goldner told CNBC on Tuesday, “We’re seeing an opportunity that will lead us, by the end of 2020, to be at about 50% or under for the U.S. market coming out of China. We believe by 2023, we should be under a third.”

The toy company has been focused on diversifying its manufacturing operations since 2012 due to “enterprise risk reasons,” according to Goldner.

“We’re seeing great opportunities in Vietnam, India and other territories like Mexico. We’re doing even more in the U.S. We brought Play-Doh back to the U.S. last year, ” Goldner said on CNBC’s “Squawk on the Street. ”

Last week President Trump tweeted, “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”

Goldner said, “In the U.S., we produce about 20% of our revenues for our U.S. business. Globally, it’s
about two-thirds of our business coming out of China but that’s down substantially from nearly 90% in 2012.”

The CEO also said, “We’re seeing an opportunity that will lead us, by the end of 2020, to be at about 50% or under for the U.S. market coming out of China. We believe by 2023, we should be under a third.”

“I’m glad to see that the administration has put off putting tariffs on our category until later, closer to the holidays,” Goldner added.

As far as how duties on consumers will be, Goldner said, “We’re having conversations with our retailers and of course we will pass along those costs.”

The company hopes to “effectively pass on those costs” by mitigating the margin internally. But “ultimately, [they] will be borne by the consumer over time.”

Goldner further said, “With time, you can redesign and redevelop your product lines with those tariffs in mind but in the short term, you do need to pass along those costs.”

Disclaimer: We have no position in Hasbro, Inc. (NASDAQ: HAS) and have not been compensated for this article.