Nenuco Maker Famosa Seeks Creditor Protection Extension to Save Business

Spain - Ekhbary News Agency

Nenuco Maker Famosa Seeks Creditor Protection Extension to Save Business

Famosa, the venerable Spanish toy manufacturer behind beloved brands such as Nancy, Nenuco, and Barriguitas, is facing an existential crisis that threatens its very survival. The company has recently petitioned Spanish courts for an extended period of creditor protection, a critical move designed to grant it crucial time to restructure its complex debts and stave off the seizure of its business and personal assets.

This plea comes at a time when the global toy industry is experiencing significant turbulence, placing immense pressure on companies like Famosa. The company aims to secure its operational continuity over the coming months, concurrently engaging in intensive negotiations with its major creditors. These include prominent financial institutions like Santander, CaixaBank (owner of Portugal's BPI), BBVA, Crédit Agricole, and Banco Pichincha. The success of these negotiations hinges significantly on the agreement of a substantial portion of creditors to extend the protection period, which currently has a limit of an additional three months.

Famosa traditionally relies heavily on the results of the holiday season, particularly Christmas, which accounts for the largest share of its annual revenue. However, the current financial headwinds could cast a shadow over this vital period. According to documentation reviewed by the Spanish newspaper ElEconomista, the request for extended protection against asset seizure was filed by three Spanish entities within the group: Famosa Holdings SL, Fábricas Agrupadas de Muñecas de Onil, and Play By Play Toys And Novelties Europe, the latter representing its plush toy division.

The challenges faced by Famosa are not isolated incidents within the industry. The global toy sector is grappling with escalating difficulties. In 2017, the retail giant Toys "R" Us declared bankruptcy in the US and Canada, burdened by over $5 billion in debt. Its Iberian operations survived only after a Portuguese group intervened, though that stake was later sold to the Italian group Artsana. In Portugal, toy company Science4You also navigated a turbulent period due to the impacts of the pandemic, ultimately overcoming it with the entry of a private equity fund, Atena Equity Partners, in 2022, a stake that was subsequently divested to management and private investors in September of the previous year.

Currently, Famosa is awaiting the completion of its parent company's, the Italian Giochi Preziosi, restructuring process. Similar to Famosa, the Italian group is in negotiations to extend its period of creditor protection, as reported by Bloomberg in November of last year. However, Giochi Preziosi's situation appears even more precarious; the company reportedly struggled to secure inventory for peak seasons and was unable to provide sufficient financial support to its Spanish subsidiary. This dual crisis, with both the parent and the Spanish subsidiary facing concurrent difficulties, places the future of iconic brands like Nenuco in jeopardy.

This unfolding situation serves as a stark warning for the entire toy industry, which is susceptible to shifts in consumer behavior, rising production costs, and intense competition from digital entertainment. Rescuing Famosa will require significant efforts not only from the company and its creditors but also from the broader market to find sustainable solutions that ensure the continued production of these toys, which have been a part of childhood for generations.

Ekhbary News Agency