Basic Fun, the Florida-based toy company behind iconic brands like Tonka and My Little Pony, has filed for Chapter 11 bankruptcy protection.
Court documents reveal Basic Fun’s financial strain, with debts estimated between $50 million and $100 million, and assets below $50,000.
The company is now pursuing $50 million in debtor-in-possession financing to navigate its restructuring process.
CEO Jay Foreman pointed to a series of setbacks that led to this decision. “Our industry and Basic Fun have been through a gauntlet of challenges,” Foreman stated, citing the Toys ‘R’ Us closure in 2018, trade wars with China, COVID-19 disruptions, supply chain issues, inventory overstock, and recent consumer spending slowdowns.
This bankruptcy filing comes just five years after Basic Fun acquired Tonka from Hasbro in 2019.
Tonka, with roots dating back to 1946, has a storied history in American toy manufacturing.
Another company is going down under Biden.
Basic Fun Holdco LLC has filed Chapter 11 Bankruptcy in Delaware.
They are the owners of Lite Brite, Care Bears, Lincoln Logs, Tinker Toys, Littlest Pet Shop, & many more.
They’re currently exploring options to keep the doors open. pic.twitter.com/sdkkzvnNIM
— Southern FFA Family (@FFAFamily) July 7, 2024
Originally starting as Mound Metalcraft in Minnesota, the brand grew from producing metal gardening tools to becoming a toy powerhouse.
By the mid-1970s, Tonka was booming, with $102 million in annual sales and operations across eight countries.
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However, like many American manufacturers, Tonka faced challenges in the 1980s, eventually moving production from Minnesota to Texas and Mexico in 1983.
Basic Fun’s struggles reflect broader industry trends.
The toy sector has been adapting to a changing retail landscape since the initial Toys ‘R’ Us closure in 2018.
While the brand has since returned under new ownership, its absence reshaped industry dynamics.
The COVID-19 pandemic further complicated matters, disrupting supply chains and altering consumer spending patterns. Initial sales surges during lockdowns led to inventory gluts as demand became unpredictable.
Despite these challenges, Foreman remains optimistic. “We intend to use the restructuring process to put those challenges in the rear-view mirror,” he said, aiming for future growth and value creation.
Basic Fun’s portfolio includes other well-known brands such as My Little Pony, Lite Brite, Lincoln Logs, Care Bears, and Tinkertoy.
