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Donald Trump’s tariffs will give makers of high-quality toys an opportunity to displace cheaper products that will “fall off the shelf”, the boss of the company behind the children’s audio system Toniebox has said.
Tobias Wann, chief executive of Düsseldorf-based Tonies, spoke as companies are grappling with whether to pass on costs from the levies imposed by the US president to consumers or to absorb them and protect market share.
Tonies has responded to levies on goods made in China by raising US prices of its most expensive tier of figurines containing audiobooks and songs, placing it among companies such as Barbie dolls and Hot Wheels maker Mattel, which are boosting prices rather than sacrifice their margins.
Wann told the Financial Times that while passing on extra costs to consumers was “something we never like to do”, lifting the price of its figurines from $17.99 to $19.99 had not impacted US sales.
The Tonies boss said that makers of cheaper — and lower quality — toys could struggle to maintain sales while also raising price tags, presenting an opportunity for companies like his.
“If there are some products that fall off the shelf because this price-value proposition doesn’t work anymore, there’s shelf space to be filled [by others].”
Tonies, which was established in 2013, is seeking to benefit from growing concern about excessive mobile phone and tablet use among children to promote its speaker cube, which sells for about €79 in Germany.
The company has sold about 9.5mn of the boxes it says offer a more wholesome and screen-free alternative. It has sold about 125mn of the accompanying figurines that are placed on top of the box to play songs, tell stories and provide educational content.
Wann, who took the helm at Tonies last year after the founders and joint chief executives stepped back from their executive roles, said that 60 per cent of German homes with children under 10 had one of its devices.
He is leading an expansion to other countries including the US, where 10 per cent of households with under-10s have its products, making it the company’s largest market by sales volume.
Tonies is aiming to double that penetration to 20 per cent within five years, despite the challenge posed by tariffs.
It started to diversify production away from China even before Trump unleashed a global trade war following his return to the White House, opening factories producing figurines and boxes in Vietnam, as well as figurines in Tunisia and Bosnia.
The company reported revenue of €481mn in 2024, up 33 per cent on the year before, though it struggled to convert sales growth into profitability. It became profitable for the first time last year, making €13mn compared with a €12mn loss the year before.
Wann said that investments in new markets had led to short-term losses in the past but that the company was now “well placed to accelerate profitability”.
Its share price is roughly half the level it reached after its public listing via a special purpose acquisition vehicle in 2021 at the height of the Spac craze.
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