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Japan’s Quake Spurs Toy Sales as Parents Seek Respite for Kids

Japan’s magnitude-9 earthquake and tsunami have spurred toy sales as parents look for ways to offset their children’s exposure to images of destruction from the nation’s worst disaster since World War II.

“Parents feel a sense of obligation to make their children happy, after they have seen footage of the damage,” said Takeo Takasu, chairman of Namco Bandai Holdings Inc. (7832) and head of the Japan Toy Association.

Namco Bandai and rivals including Tomy Co. and Sega Sammy Holdings Inc. (6460) are counting on character-themed toys and board games to help sales rebound for a second year following a two- year slump. Demand has been “faring well since April” and may beat last year’s level, Takasu said in a Bloomberg Television interview yesterday.

“People may be buying toys to soothe their children, especially areas devastated by the tsunami,” said Takashi Oka, an analyst at TIW Inc. “It’s still too early to say if this trend will last throughout the year, as toy sales usually peak in the Christmas season.” He rates Namco Bandai shares “neutral plus.”

Bandai’s Kamen Rider toys, which are based on an action- hero TV series for children, and board games that promote communication among families are attracting customers, Takasu said. He declined to give an estimate for sales of the products or for the industry this year.

Japan’s toy market, excluding videogames, grew 3.5 percent to 670 billion yen ($8.3 billion) in the year ended March 31 from 647 billion yen, the Tokyo-based toy group said June 14. The increase was the first in three years, as Japan’s birth rate has held near the record low set in 2005.

Japanese women gave birth to 1.39 children on average last year, compared with a record low 1.26 in 2005, health ministry statistics show. By comparison, the average rate for U.S. women was 2.01 in 2009, according to the figures.

After the March 11 quake, consumers are spending on “inexpensive things like toys,” Yoshiharu Suzuki, president of Sega Toys Co., said yesterday. “The challenge is to produce products that fit in other countries, not just for Japan.”

To contact the reporter on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net; Mike Firn in Tokyo at mfirn@bloomberg.net

To contact the editor responsible for this story: Frank Longid at flongid@bloomberg.net

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