Media outlets have become rather fond of the ‘good week / bad week’ editorial approach – I’m sure you’ve seen it plenty of times in many variations (winners / losers, what’s hot / what’s not etc). Essentially, the format aligns with the old media adage of making the good amazing and the not -so-good terrible – no shades of grey, just the two extremes.
This format sprang to mind this week, as many of the biggest toy-related news stories seemed to fall neatly into one camp or the other. So, who has had a ‘weekus horribilis’ (you would never know I have an A-grade Latin O-Level, would you…)? Well, Hamleys for starters. On one level, Sunday’s parade was a huge success – if by success you mean “a massive number of people turned up.” I have no idea if it was really 800,000 as some media outlets suggested, but it was absolutely rammed. And that’s where the problems started; mayhem ensued, which was scary enough for adults, yet alone small children, some of whom were reduced to tears. A few fights even broke out, at least one person was allegedly hospitalised, scheduled shows and appearances were cancelled to avoid making things worse and parents quickly took to social media to complain about the lack of crowd control and the overall state of pandemonium. In fairness, the queues to get into Hamleys on the day were truly unbelievable, and it was almost a really good event – in many ways, perhaps they were victims of their own success?
Mothercare has also had a bad week, after its latest results saw its sales increase but its profits fall through the floor, with last year’s trading profit of £5.9m turned into a loss of 0.7m, while statutory losses widened from 0.8m to a whopping £16.8m. It was a similar tale at Hornby, where half-year losses rose to £5.7m and net debt more than doubled to £4.7m. I’m also picking up rumours of major discontent in the ranks – to say that it is not a happy ship would be putting it mildly. I think we may be heading for a return to the days when Hornby was essentially a niche model company, with little to sustain the interest of the mainstream toy retail channel. Sad times, especially for the staff – but unfortunately, I can see a lot less of those in the future too.
It hasn’t been a great week on the PR front for Amazon, which has been accused of delivering Christmas presents without outer packaging, so that children could see exactly what had just been delivered to the house. It’s almost as if the magic of Christmas doesn’t really mean anything in Amazon’s algorithmically-driven universe.
As for winners, surely Toys R Us CEO Dave Brandon is the runaway favourite? Or at least he will be, if the court grants his request to be given a new $12m retention bonus, to add to his $3.7m salary and previous $2.8m retention bonus – which, interestingly, was approved just before TRU filed for bankruptcy protection. In the court petition (presumably to the sound of mournful violins and sobbing), it was claimed that top employees have been “asked to perform monumental tasks” as a result of the recent restructure. Or, to put it another way, “have been asked to do their jobs.” One analyst observed: “Brandon could receive nearly $15 million which is related to a bankruptcy that it was his job to prevent from happening in the first place.”
Don’t get me wrong, I have tremendous sympathy with TRU, particularly the store staff, but isn’t this just bankers’ bonuses all over again? I can’t believe US suppliers will be overly thrilled, especially those which have been struggling to get paid, or have faced deductions for insurance ‘excesses’ (there is a $5.4m provision in Spin Master’s latest set of accounts for this). Unsurprisingly, creditors have yet to agree to the plan, which also hands a further $16m to 20 other executives, so ‘Dodgy Dave’ may yet have to hand back his award.
TRU UK shoppers were also winners last weekend; savvy shoppers could combine deals which gave them 3-for-2, a £10 gift card and a further 20% off at the till. Why they didn’t go the whole hog and tape a £20 note to each box is a mystery. I’ll bet a few toy retailers were in the queues, with a large van waiting outside.
Also winning are Toy Fair and Hasbro, after the two parties agreed a deal for Hasbro to have a presence at next year’s show, having been absent for the past couple of years. Hasbro will be taking two conjoined rooms in the upper gallery to showcase its latest products to the independent retail trade. The focus will be on ranges that are specifically tailored for the indies, and during the recent 2018 preview I attended, I got the distinct impression that the company is working harder than ever to differentiate its ranges for individual retail channels. I think it’s great that Hasbro is taking the opportunity to engage with independent retailers at Toy Fair, helping to make their trips to the show even more worthwhile – so everyone’s a winner.
I’ll end on that positive note, I’m off to busk outside TRU’s New Jersey HQ, hoping the freshly-incentivised top brass are feeling generous.