NEW YORK (CNN/Money) -
Top toymakers are offering exclusive toys to Toys R Us and even paying to advertise the merchandise in an effort to help the troubled retailer in its battle with Wal-Mart, according to a published report.
The Wall Street Journal reported Wednesday that toymakers such as Mattel Inc., Hasbro Inc., Leap Frog Enterprises Inc. and Lego AG have agreed to offer exclusives to the nation's largest stand-alone toy retailer. It said 21 of the toys will star in their own TV commercials with manufacturers footing the bill for 17 of the spots.
The paper said that the toy manufacturers are concerned what it would mean for their future if Toys R Us were to be forced out of the business, leaving Wal-Mart to become even more dominant in toy sales. Wal-Mart, which the paper said passed Toys R Us for toy market share in 1999, has a reputation among suppliers for driving down prices.
"Toys R Us is the industry's lifeblood. As Toys R Us goes, so do we," one toy-company executive told the paper on a not-for-attribution basis.
Wayne, N.J.,-based Toys R Us announced in August it was looking at a possible sale of its global toy business. It also reported a wide second quarter loss in August, although it tried at that time to play down speculation it was looking to exit the toy business.
CNN/Money reported in October that some toymakers were shunning Wal-Mart over aggressive price-cutting.
In the past the toymakers had been concerned about angering Wal-Mart by offering this kind of support to a competitor, the paper reported. But it said they have decided that they can't afford to risk losing Toys R Us, which carries a much wider selection of toys than Wal-Mart and is important to year-round sales.
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Wal-Mart declined to comment to the paper about the Toys R Us exclusives or on what Wal-Mart's countermoves might be. It has some exclusive toy products of its own this season, but it is not getting the same level of marketing support from toymakers.