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Uni-Scapegoats…it’s the Friday Blog!

Published on: October 27th, 2017

A couple of interesting postscripts to last week’s Friday Blog. First, it seems that Gary Grant’s avuncular appearance on The Apprentice only told half the story. Although the footage wasn’t shown, apparently the candidates walked out three times because Gary wasn’t prepared to pay the price they wanted. One team ended up selling their product to him below the minimum price they had been told they could offer, while both teams gave free items of stock equivalent to an extra 5%. Suggesting that Gary took it easy on them was perhaps a little optimistic of me – somehow all feels right with the world again.

My comment about Porgs struck a chord, with stock already looking scarce in many retailers – except those who told Posh Paws that “boys plush won’t sell”, where stock is not so much scarce as non-existent. I suspect a few of those retailers may choose to re-evaluate their decision over the coming weeks.

Elsewhere, NPD’s recent weekly reports have made interesting reading. At first sight, the figures from weeks 40 and 41 – when trading was reported as 11% up and 11% down respectively – seem all over the place, like an untethered trampoline in the middle of Storm Brian. Closer inspection reveals that the weekly fluctuations were largely driven by the timing of promotional activity, especially within the grocers. So, it’s ‘as you were’ – the significant swings effectively cancelled each other out, leaving the market marginally down (1%) so far in October. We’ll all be watching the next couple of weeks very closely to see if a more distinct performance trend starts to emerge – although I would venture to suggest that most retailers would probably take a repeat of last year’s Q4 sales performance if they were offered that option right now.

What I did find particularly interesting about the NPD reports was the fact that the top five items all sold at full RRP, including the £100 Luvabella doll and the £60 large LOL Surprise! doll. In fact, I understand that this trend also applies to around 50% of the top 25 items, a much larger percentage than might have been expected, based on previous years’ experience. Perhaps the penny has finally dropped; if you have what people really want, there is no reason to discount it heavily (not yet, at any rate). So even if sales are flat, maybe profit is higher? Have we finally learned the ‘flowers on Mothers’ Day’ lesson? About time, some might say…

Half-term week has seen several consumer events taking place, including Kidtropolis at ExCel and Brick Live in Birmingham, while Sambro opened its new Southern Showroom in High Wycombe, an event attended by almost as many licensors as were present at BLE. It’s a great new facility, which will no doubt help to facilitate regular dialogue with the many retailers and licensing companies based in that neck of the woods.

Over in the US, while the TRU situation rumbles on quietly – with TRU claiming that 90% of its top 100 vendors have now resumed shipments – other US retailers are coming under the microscope, with ShopKo the latest retailer being rumoured to be thinking of entering Chapter 11 in order to extricate itself from its owner, Sun Capital. With over 350 stores, while not in TRU’s league, it still has a sizeable toy presence – what it does share with TRU is the fact it was acquired by the venture capitalist through a leveraged buyout. The headlines will scream about the ‘death of retail’, but isn’t the real story here the death of leveraged retail buyouts?

Finally, this week has seen both Hasbro and Mattel release their latest quarterly results, with both companies citing the ongoing tribulations of TRU as a major factor not just in their recent performance, but also in what is likely to happen in the next quarter (and probably several more after that too). Clearly it would be foolish not to acknowledge the impact that the situation is having, but I can’t help thinking that that TRU is going to find itself as the equivalent of an employee who recently left their company, i.e. blamed for absolutely everything for as long as is humanly possible. The government will probably start blaming them for the rise in inflation and the £490bn which went missing from the UK economy this week, while I’ll bet Gemma Collins lawyers have already been on the phone after her (literal) fall from grace last weekend. TRU as the world’s uni-scapegoat anyone?

 

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