After spending 37 years in the toy & licensing community, you might be forgiven for thinking that nothing would surprise me. Au contraire, almost every week I find myself coming across a particular development or piece of news that catches me unaware. For example, take the recent acquisition of Talking Tom & Friends by Chinese consortium United Luck. If the rumours of Wayne Rooney being offered £1m a week to play football in China suggest that the country has a surplus of cash and a surfeit of common sense, it is pocket money compared to the $1 billion paid for Tom and his mates. Now don’t get me wrong, it’s a nice little property with hitherto unfulfilled potential, but $1 billion…really?!
No less unfathomable is the rumoured acquisition of Makie Lab – makers of custom 3D printed dolls – by Disney. Like a lot of modern day cutting edge technology-driven companies, the big challenge the owners of Makie Lab have always faced is how to turn it into a viable, sustainable business. Maybe the clout of Disney will make a difference. Except I foresee a potential flaw: given Disney’s labyrinthine approval process, every doll design submitted will surely be turned down and returned with 100 suggested changes. By the time a design is finally approved, the child who originally wanted the doll will probably just be finishing university….
Perhaps less surprising was the news that Toys R Us has laid off 250 people – 15% of its head office workers – in the US. It has been repeatedly said that the global toy industry needs Toys R Us, and it has certainly been suggested to me in the past that the largest American toy companies would do whatever it takes to keep it trading – the ‘too important to fail’ argument. But despite bold claims in the run-up to the festive season, its performance failed to live up to expectations, so further cost-cutting was sadly inevitable. Let’s hope these job losses are the extent of the necessary pruning.
More positively, it was no great shock to see The Entertainer continuing to expand its store count, with new outlets shortly to open in Northampton and Truro. Gary Grant has always maintained that there is no shortage of options when deciding where to open new stores. Indeed, his belief that tough economic conditions make it easier for him to negotiate deals with landlords may mean he has a field day over the next few years.
And it’s not just the economic conditions which are a concern to High Street retailers this year. I’ve written plenty about the ongoing challenges they face from the online channel – let’s not be coy, Amazon – and from discounting by major retailers. But 2017 will see a major new threat in the form of the imminent business rate revaluation. The media has been awash with people lobbying the government to reconsider the proposed changes. For the sake of any toy retailers who find themselves facing huge hikes, I hope that the government decides to rethink its strategy. The principle that some independents are being asked to accept massive increases, while the big four supermarkets and Amazon are getting substantial reductions, seems utterly perverse. Even these dolls I saw in Nuremberg seem astonished by just how ridiculous that idea is (and I bet that is not the last thing they’ll be astonished by this year either)…