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A packed news week…it’s the Friday Blog!

Published on: July 14th, 2017

I’m going to crack straight into the news this week, as there is a lot to talk about. I gather there has been a reorganisation at Mothercare, which has resulted in Brian Mclaughlin moving on. If my source is correct, it appears that, going forward, Mothercare will be placing greater emphasis on products aimed at the Pre-School age group, presumably meaning that products aimed at older children will be far less of a focus for the retailer. Personally, I think this is an eminently sensible strategy, but there will be winners and losers amongst suppliers as a result, that’s for sure.

I understand that Hamleys has been requesting an increase in its payment terms for FOB lines, from 30 to 90 days. Not only does this rather negate the whole point of FOB ordering, it also puts suppliers out of pocket to the tune of an extra 1% (the generally accepted figure seems to be 0.5% per month). I’m guessing that most aren’t happy to agree to the financial loss, yet alone with the timing – I know I have touched on this subject before, but is it fair and reasonable to request (impose?) penalties long after prices have been agreed and orders have been placed.

Some suppliers have also been suggesting that they believe certain retailers – particularly cash-rich ones – are holding back initial order quantities in the hope / belief that they will get better deals from suppliers as the year unfolds. Naturally, suppliers are not exactly thrilled, but in fairness, I’m not sure I blame retailers for this particular tactic – there is a strong argument to say that is just playing the game. Of course, there are risks involved: if a line is in short supply (and I have already heard of a couple of big lines, including some which appear in major retailers’ top toy lists, that are definitely going to be short), the chances are those retailers won’t get the level of stock they want. But for a lot of lines, perhaps the gamble will pay off.

B&M’s first quarter results were released this week, and a stellar set of figures they were, the best first quarter for three years according to chief executive Simon Arora. Simon also spoke about B&M, and the discount sector in general, benefitting from Brexit, as he believes customers will seek out bargains in times of uncertainty. Few would disagree – I think there is a growing sense that the majority of us will be poorer as a result of Brexit, certainly in the short term. In the light of all this, I am still amazed to come across the occasional supplier who claim they can’t work with B&M for fear of upsetting other customers. I’m sorry, but I really don’t get that – B&M is here to stay, it is only going to grow its presence in the toy market and suppliers who work with them tell me what a joy they are to deal with – straight, to the point and commercially transparent (without the rebates, endless deductions and contributions and late changes to terms that many other retailers are now employing as standard trading practice). I think it’s a brave person who chooses to ignore them.

From a retailer which I respect to a retailer I have less time for: Amazon. I’m sure it hasn’t escaped your notice that it’s been Prime Week, which still seems to be a bigger deal in the US than in the UK. Intriguingly, other retailers have attempted to hi-jack Amazon’s big day, and I have seen some reserach which suggests the tactic has proved successful to a point, with some achieving higher clicks and searches than Amazon on the day. Nevertheless, the Daily Fail (that is not a typo, by the way) reported earlier this week that Amazon now controls nearly 40% of online sales, which puts it well over the threshold of what is accepted to constitute ‘monopoly power’. Fair enough, its share of the toy market is nowhere near that figure, but it must still be a major concern for suppliers and retailers to see its relentless onward march. If only it paid proper taxes on those figures, maybe I’d have more time for them…

Finally, Peterkin’s Mokuru has been picking up some nice media coverage this week, as journalists look for what might follow spinners as the next craze. To help keep up with demand, Peterkin’s Simon Blacker has been pitching in, as you can see from the photo below. After Grossman’s Ed Burns was pictured in a similar ‘all-hands-on-deck’ scenario last month, making spinners, I see a worrying trend developing – executives having to actually do some real work. Will ICTI not step in to save these pour souls?

 

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