The End of Toys R Us Won't Be the End of Hasbro, Mattel, or JAKKS

The days may be numbered for Geoffrey the Giraffe, and investors of publicly traded toy makers are feeling the pinch. Shares of Hasbro (NASDAQ: HAS), Mattel (NASDAQ: MAT), and JAKKS Pacific (NASDAQ: JAKK) took hits of 2% to 5% on Wednesday, after reports surfaced that Toys R Us is hiring a firm to help restructure its debt by potentially filing for bankruptcy protection.

The possible bankruptcy of the country's largest dedicated toy retailer is naturally going to send shock waves through the companies that arm its shelf space. If Toys R Us files for reorganization, it would mean that creditors may have to take pennies on the dollar, and that isn't going to bode well for the payments that the toy manufacturers expect for their products. Beyond the near-term hit, the long-term concern is that Toys R Us may have to eventually liquidate, giving Hasbro, Mattel, and JAKKS Pacific one less outlet to market their playthings.

These are scary times for Toys R Us, just as they've been for most brick-and-mortar chains. But the toy makers themselves don't have to be scared.

Source: Fool.com