Dallas, Texas 11/13/2013 (Financialstrend) – The $542 million market capped toys and games seller LeapFrog Enterprises Inc. (NYSE:LF) stock surprised the markets on November 11 by posting a 5.44% increase in its market value reversing a losing trend it had been pursuing through the whole of last week of trading. The toy maker and announced last week that the sales of its flag ship “LeapPad Ultra” device is way lower than what it’s mandarins had expected in the run up to the holiday season.
This chance comment by the toy maker had led to an across the board dip in confidence in the retail sales sector with few analysts predicting that this softening could be a common trend which might impact other players too. Readers should note that traditionally, in the run up to the holiday season starting in mid September to end of the year, the companies in the garments and consumer durables and electronics sector manage to achieve up to 40% of their annual sales turn over. Hence the trends going into this season assumes huge importance and is tracked closely by the companies themselves and the wider market analysts and business community.
For LeapFrog another specific concern is related to the go to business model it is pursuing with respect to selling tablets which are geared exclusively to meet the needs of kids. Some digital device experts have even suggested that the children’s product is priced too high at $150. They have suggested that customers would rather spend a few additional dollars to augment their existing apps collection on their ipads and other full blown android based tablets. Others have gone on to point out that the big competition the firm is facing from the likes of Apple and Toys R Us from their tablet offerings is another reason for the slow sales that LF is experiencing and is not an indication of the lack of customer interest in the market.