Kiwi toy entrepreneur Nick Mowbray says businesses in the US are pressing pause on major purchasing decisions.
There's ongoing uncertainty about Donald Trump's tariff plan.
The US President says he might temporarily lower tariffs on the auto industry following temporary reductions for Chinese electronics and goods from most other countries.
Zuru Toys co-founder Nick Mowbray told Mike Hosking manufacturers and retailers are in a holding pattern, waiting to see how things pan out.
He says it would be hard to say they're not worried, but they're just trying to deal with the situation as it unfolds daily.
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Speaker 1 (00:09):
You're listening to a podcast from News Talk sed B.
Follow this and our wide range of podcasts now on Iheartradiour.
Speaker 2 (00:19):
Me Piven, Entourage, Fame and mister Selfridge Fame, among other
things with us after eight o'clock meantime, as we continue
to swim in this area of uncertainty around the Trump
view of the world, in this tower of war, there
are a few more directly affected than the Chinese, of course,
who've currently set at a number of one hundred and
forty five percent, and within China the toy industry is
getting smashed. The irony is the toy industry employees, for example,
(00:40):
more than two hundred and seventy thousand Americans, but eighty
percent of the product, of course, is still made in China. Anyway.
In the middle of all of this is Zuru Toys
co founder Nick Mowbray, who is with us. Nick, very
good morning to you.
Speaker 3 (00:51):
Morning Mike.
Speaker 2 (00:51):
How do you plan?
Speaker 3 (00:54):
You don't?
Speaker 4 (00:55):
I think every day we are getting together for a
new planning meeting because everything seems to change each day,
so very very difficult to plan, very difficult to allocate capital.
We're basically in a state of just stopping everything at
the moment, because it is impossible to plan.
Speaker 2 (01:13):
What do you think will happen?
Speaker 4 (01:18):
It is hard to know at this stage, or the
administration seems to change their mind every day, and so
I imagine these tariffs are going to be negotiated down.
Speaker 3 (01:29):
But we as a result of that, are just in
a holding pattern. More or less.
Speaker 4 (01:34):
I think we ship about willship about two billion dollars
worth of goods to the US this year. So at
that run rate, that makes our tariff's worth about three
billion dollars at the moment.
Speaker 3 (01:44):
So that is obviously impossible to do.
Speaker 4 (01:48):
Obviously, we're moving to sange retails, moving to a first
sale model. But at this stage a lot of retailers
are just pausing, and we're all in a holding pattern.
Speaker 2 (01:59):
Why don't you do what Donald Trump says you should do,
which is simply close everything you have in China down
and move it to I don't know, Kansas.
Speaker 3 (02:09):
Yeah, obviously impossible.
Speaker 4 (02:10):
America has about four percent unemployment, and so I think
in China you've got around one hundred and twelve million
people at work in manufacturing. In the US you've got
about eleven million. And China has a deep and complete
ecosystem for toys. I mean, it is an industry that
moves very quickly. You've got molding, electronics, packaging, tooling, and
(02:32):
that whole supply chain is all very close together. There's
lots of competition, all the infrastructures built out, they've got
decades and decades of experience. I think Ensen alone has
more engineers that graduate every year, and manufacturing engineers and
the whole of the US. So you're in a business
that moves incredibly quickly with complex products, and you've got
(02:53):
the whole ecosystem that's been built over decades and decades.
Speaker 3 (02:56):
So I think, Neil, basically it is impossible.
Speaker 2 (03:00):
Yes, exactly. The other thing he would want you to
do is, I don't know how this works. You you might know,
you don't pass the cost on to the consumer. You
just give him some money by because you pay the
tariffs as his seemingly, how does that work.
Speaker 3 (03:15):
It doesn't.
Speaker 4 (03:16):
So at one hundred and forty five percent tariff, we
have to pass through significant price increases, which we'll see
obviously volumes four off significantly as well. But because the
environment is so unstable and changing literally every day, all
our retailers in a state of parallel a state of
pause as well at the stage, so everything is just
(03:38):
more or less in a holding pattern. Most manufacturers are
holding right now, as are most retailers, and we're just
waiting to see what's going to transpire.
Speaker 2 (03:47):
Are you worried?
Speaker 3 (03:50):
It'd be hard to say we're not worried.
Speaker 4 (03:51):
I think last week was an interesting week when I
was in Bentonville, Arkansas with Walmart and Zoo won two
of their seven Supplier of the Year awards, so that
was a pretty amazing achievement. And then the very next
day that the first tariffs came into play, so we
went from quite a hig quite a low, and then
obviously it's escalated ever since then.
Speaker 3 (04:11):
So it would be.
Speaker 4 (04:13):
Hard to say we're not worried, but we're moving. We're
in a lucky position obviously compared to I think a
lot of smaller supplies, smaller manufacturers and retailers in the US.
We will be able to weather this and come out
the other side potentially even stronger. But it really depends
how long it continues for and of course we're all
(04:34):
hoping that that it doesn't continue very long. But the
administration is definitely extremely chaotic.
Speaker 2 (04:41):
Is does America feel a bit. I mean, you're there constantly.
Does America feel a bit freaky at the moment or not?
Speaker 3 (04:50):
Hard to know?
Speaker 4 (04:51):
Hard to know, to be honest, I'm pretty much cooped
up on our office and at my place there in LA,
just working on this terraff situation every day, working with
our retailers. So I mean added about that much, apart
from from yesterday I popped down to the to the INDYCA.
So it's hard to know, to be honest, I think
retailers are all just trying to deal. We're all just
(05:12):
trying to deal with the situation as an unfolds daily.
Speaker 2 (05:15):
Jeez. All right, good to catch up with you. Appreciate
it very much. Nick Mowbray, who's the Zuru Toys co founder?
What an inside a seventeen minutes away from Mate.
Speaker 1 (05:22):
For more from News Talk sed B, listen live on
air or online, and keep our shows with you wherever
you go with our podcasts on iHeartRadio.
You're listening to a podcast from News Talk sed B.
Follow this and our wide range of podcasts now on Iheartradiour.
Speaker 2 (00:19):
Me Piven, Entourage, Fame and mister Selfridge Fame, among other
things with us after eight o'clock meantime, as we continue
to swim in this area of uncertainty around the Trump
view of the world, in this tower of war, there
are a few more directly affected than the Chinese, of course,
who've currently set at a number of one hundred and
forty five percent, and within China the toy industry is
getting smashed. The irony is the toy industry employees, for example,
(00:40):
more than two hundred and seventy thousand Americans, but eighty
percent of the product, of course, is still made in China. Anyway.
In the middle of all of this is Zuru Toys
co founder Nick Mowbray, who is with us. Nick, very
good morning to you.
Speaker 3 (00:51):
Morning Mike.
Speaker 2 (00:51):
How do you plan?
Speaker 3 (00:54):
You don't?
Speaker 4 (00:55):
I think every day we are getting together for a
new planning meeting because everything seems to change each day,
so very very difficult to plan, very difficult to allocate capital.
We're basically in a state of just stopping everything at
the moment, because it is impossible to plan.
Speaker 2 (01:13):
What do you think will happen?
Speaker 4 (01:18):
It is hard to know at this stage, or the
administration seems to change their mind every day, and so
I imagine these tariffs are going to be negotiated down.
Speaker 3 (01:29):
But we as a result of that, are just in
a holding pattern. More or less.
Speaker 4 (01:34):
I think we ship about willship about two billion dollars
worth of goods to the US this year. So at
that run rate, that makes our tariff's worth about three
billion dollars at the moment.
Speaker 3 (01:44):
So that is obviously impossible to do.
Speaker 4 (01:48):
Obviously, we're moving to sange retails, moving to a first
sale model. But at this stage a lot of retailers
are just pausing, and we're all in a holding pattern.
Speaker 2 (01:59):
Why don't you do what Donald Trump says you should do,
which is simply close everything you have in China down
and move it to I don't know, Kansas.
Speaker 3 (02:09):
Yeah, obviously impossible.
Speaker 4 (02:10):
America has about four percent unemployment, and so I think
in China you've got around one hundred and twelve million
people at work in manufacturing. In the US you've got
about eleven million. And China has a deep and complete
ecosystem for toys. I mean, it is an industry that
moves very quickly. You've got molding, electronics, packaging, tooling, and
(02:32):
that whole supply chain is all very close together. There's
lots of competition, all the infrastructures built out, they've got
decades and decades of experience. I think Ensen alone has
more engineers that graduate every year, and manufacturing engineers and
the whole of the US. So you're in a business
that moves incredibly quickly with complex products, and you've got
(02:53):
the whole ecosystem that's been built over decades and decades.
Speaker 3 (02:56):
So I think, Neil, basically it is impossible.
Speaker 2 (03:00):
Yes, exactly. The other thing he would want you to
do is, I don't know how this works. You you might know,
you don't pass the cost on to the consumer. You
just give him some money by because you pay the
tariffs as his seemingly, how does that work.
Speaker 3 (03:15):
It doesn't.
Speaker 4 (03:16):
So at one hundred and forty five percent tariff, we
have to pass through significant price increases, which we'll see
obviously volumes four off significantly as well. But because the
environment is so unstable and changing literally every day, all
our retailers in a state of parallel a state of
pause as well at the stage, so everything is just
(03:38):
more or less in a holding pattern. Most manufacturers are
holding right now, as are most retailers, and we're just
waiting to see what's going to transpire.
Speaker 2 (03:47):
Are you worried?
Speaker 3 (03:50):
It'd be hard to say we're not worried.
Speaker 4 (03:51):
I think last week was an interesting week when I
was in Bentonville, Arkansas with Walmart and Zoo won two
of their seven Supplier of the Year awards, so that
was a pretty amazing achievement. And then the very next
day that the first tariffs came into play, so we
went from quite a hig quite a low, and then
obviously it's escalated ever since then.
Speaker 3 (04:11):
So it would be.
Speaker 4 (04:13):
Hard to say we're not worried, but we're moving. We're
in a lucky position obviously compared to I think a
lot of smaller supplies, smaller manufacturers and retailers in the US.
We will be able to weather this and come out
the other side potentially even stronger. But it really depends
how long it continues for and of course we're all
(04:34):
hoping that that it doesn't continue very long. But the
administration is definitely extremely chaotic.
Speaker 2 (04:41):
Is does America feel a bit. I mean, you're there constantly.
Does America feel a bit freaky at the moment or not?
Speaker 3 (04:50):
Hard to know?
Speaker 4 (04:51):
Hard to know, to be honest, I'm pretty much cooped
up on our office and at my place there in LA,
just working on this terraff situation every day, working with
our retailers. So I mean added about that much, apart
from from yesterday I popped down to the to the INDYCA.
So it's hard to know, to be honest, I think
retailers are all just trying to deal. We're all just
(05:12):
trying to deal with the situation as an unfolds daily.
Speaker 2 (05:15):
Jeez. All right, good to catch up with you. Appreciate
it very much. Nick Mowbray, who's the Zuru Toys co founder?
What an inside a seventeen minutes away from Mate.
Speaker 1 (05:22):
For more from News Talk sed B, listen live on
air or online, and keep our shows with you wherever
you go with our podcasts on iHeartRadio.
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