The largest toy manufacturer in the United States is to expand the footprint of two domestic factories by 50%. This is a response to demand from retailers as Trump's tariffs threatened to raise costs.
New Jersey-based Arts and Crafts Company CRA-Z-ART is investing “millions of dollars” to add more than 500,000 square feet to its factories in Tennessee and Florida.
CRA-Z-ART Chairman Lawrence Rosen said it is partially addressing retailers who fear tariffs will curb consumer demand as basic necessities become more expensive. Although Rosen refused to name a particular retail customer, CRA-Z-ART products appear on websites of major chains such as Walmart, Target, Amazon and Walgreens.
“They are under enormous pressure from them because they are worried about keeping their pricing competitive,” Rosen said. “We protect our customers and ourselves.”
According to Rosen, big box chains view domestic manufacturing as a way to “risk” against tariffs. The retailer has promised Rosen to make more products in the US, including “soft fabrics,” “massage foot spa,” “sidewalk chalk,” and “spiral art” sets.
In response, the 102-year-old family-owned company that makes art sets, slimes, markers, paints, pencils and puzzles in the US and China has transported manufacturing equipment, including plastic molds, from Asia to the US for the past month.
“We've moved most of what's in China here, replicating some machines and investing in high-speed automation equipment,” said Rosen, whose family founded the company a century ago.
“When Trump announced higher tariffs in China, it was total steam,” Rosen added. “I want to control my destiny rather than be exposed to ups and downs and daily tariff changes.”
Cra-Z-Art already manufactures around 35% of its US products, including pencils, jigsaw puzzles, storage boxes, crayons, markers and more. Currently, they plan to increase domestic production to at least 45%.
Rosen estimates that his investment will double the company's revenues by $400 million within the next two years. But he also aims to benefit Goose by saving money and time.
Plastics made from fossil fuels cost less to produce in the US than in China. Overseas cargo costs between $4,000 and $11,000 per 40-foot container are eliminated. Manufacturing in the US significantly reduces the time it takes to manufacture and deliver products in 90 days, Rosen said.
CRA-Z-ART is one of a handful of US companies that manufacture toys in the US, including MGA Entertainment's small Tyke and privately owned Simplay3. Michigan American plastic toys also make riding toys, furniture and outdoor toy sets.
The majority of toys are made in China and remain low in labor costs between $3 and $4 per hour.
Rosen is investing in expensive robotics equipment and expanding its factory to Lewisburg, Tennessee. There, the company owns the building and has been renting it since 2021 to Jacksonville, Florida.
“We need more automation in the US for higher wages,” Rosen said. He declined to comment on the number of additional employees he could employ in the United States.
Labor-intensive items like Barbie dolls with hair, painted faces and stitched clothing are not cost-effective in the US, experts say.
Like a few other US toy makers, Rosen has called from competitors who want CRA-Z-ART to produce a portion of their products.
Rosen says he owns a 20% stake in Public Holding Jack Pacific in Santa Monica, California, with the flywheel carrying the toys on board.
“I can produce for another company,” Rosen said. “They could be one of the companies I'm doing.”
