The biggest toy maker in the US is enlarging the footprint of its two domestic factories by 50% — a response to surging demand from retailers as Trump’s tariffs threaten to raise costs, The Post has learned.
Cra-Z-Art, New Jersey-based arts and crafts company, is investing “millions of dollars” to add more than 500,000 square feet to its factories in Tennessee and Florida – despite a lack of clarity on whether tariffs will rise, fall or spark a recession after the US imposed a 20% levy on goods from China, according to its owner.
Cra-Z-Art chairman Lawrence Rosen said he’s responding partly to retailers who fear the tariffs will squelch consumer demand as basic necessities become more expensive. While Rosen declined to name specific retail customers, Cra-Z-Art goods appear on the websites of major chains including Walmart, Target, Amazon and Walgreens.
“We are getting a tremendous amount of pressure from them because they are concerned about keeping their pricing competitive,” Rosen said. “We are protecting our customers and ourselves.”
Big-box chains see domestic manufacturing as a way to “de-risk” against the tariffs, according to Rosen. The retailers have promised Rosen that if he makes more products in the US – including its “Softee Dough,” “Massaging Foot Spa,” “Sidewalk Chalk” and “Spiral Art” sets – they will buy more.
In response, the 102-year-old, family-owned company – which makes art sets, slime, markers, paints, pencils and puzzles in the US and in China – has spent the past month shipping manufacturing equipment, including plastic molds, to the US from Asia.
“We are moving a large percentage of what we have in China to here, duplicating some machinery and investing in high speed automation equipment,” said Rosen, whose family founded the company a century ago.
“When Trump announced the higher tariffs on China, it’s been full steam ahead,” Rosen added. “I’d rather control my own destiny than be subject to the ups and downs and the daily changes to tariffs.”
Cra-Z-Art already makes about 35% of its products in the US including pencils, jigsaw puzzles, storage boxes, crayons and markers. Now, it’s planning to increase its domestic production to at least 45%.
Rosen estimates that his investment will double the company’s revenues to $400 million within the next two years. But he also aims to goose profits by saving money and time.
Plastic, which is made from fossil fuels, costs less to produce in the US than in China. Overseas freight costs of $4,000 to $11,000 per 40-foot container will be eliminated. Manufacturing in the US also slashes the time it takes to make and deliver products to 90 days, Rosen said.
Cra-Z-Art is among a handful of US companies that make toys in the US, including MGA Entertainment’s Little Tikes and privately owned Simplay3, both of which operate Ohio facilities that are focused on larger, outdoor toys. American Plastic Toys in Michigan also makes riding toys, furniture and outdoor toy sets.
The vast majority of toys are made in China, where the cost of labor remains low at between $3 and $4 an hour.
Rosen is investing in pricey robotic equipment to expand his factories in Lewisburg Tenn., where the company owns its building and in Jacksonville, Fla. where it has been renting since 2021.
“You need more automation in the US because of the higher pay,” Rosen said. He declined to comment on how many additional employees he may hire in the US.
Some labor-intensive items like Barbie dolls that have hair, painted faces and stitched clothing are not cost-efficient to make in the US, experts say.
Like the handful of other US toy makers, Rosen also is fielding calls from competitors who want Cra-Z-Art to manufacture some of their products.
Rosen noted that he owns a 20% stake in publicly held Jakks Pacific of Santa Monica, Calif., which makes Fly Wheels ride toys among other items.
“I can produce for another company,” Rosen said. “They could be one of the companies I do that for.”
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