Alan Smith announced as Posh Paws’ new managing director

Alan joins from his own company, Maad Toys, bringing a wealth of experience and expertise to the role.

Posh Paws International is pleased to welcome Alan Smith to the role of managing director.

From past senior management positions at Tomy, Ideal/Playmates and Sega, Alan’s knowledge of the toy industry, licensing and international markets will be invaluable in ensuring Posh Paws delivers on its multi-market and multi-channel objectives.

Phil Setter, owner of Posh Paws commented: “We are pleased to welcome Alan to the company at such an exciting time for the business. Alan’s strong understanding and key connections both in licensing and overseas, plus his previous wide experience made him an obvious choice for the position.”

Alan added: “I could not be more pleased to be joining a management team so full of drive and ambition for the future of Posh Paws and am excited by the opportunities the business has planned over the coming months and years.”

Amazon’s quarterly profits double to $1.6b

Company announces a hike in the cost of prime for its US customers, after share price soars to record high of $1,625. 

Amazon has reported that it has more than doubled its profits to $1.6b in the first three months of 2018.

The results sent the company’s shares soaring 7% to a new record of $1,625 in after-hours trading, adding billions to the fortune of its founder, Jeff Bezos.

During the earnings call, the company, which said last week that it had signed up more than 100m people to its Prime subscription service, revealed that the cost of a Prime subscription would increase to $119 per year for US customers, effective from 11th May for new subscribers and to renewed subscriptions from 16th June. It represents the first price hike in the US since March 2014.

The company’s chief financial officer Brian Olsavsky said that the price hike was a reflection of the increased cost of handling same-day, one-day and two-day shipping and “increased value” for customers.

In the first quarter of 2018 Amazon collected more than $550m a day in revenue from Amazon.com sales, web hosting, TV production and Whole Foods, the upmarket US grocery chain it bought last year.

Amazon also reported strong growth at its highly profitable cloud computing division, Amazon Web Services (AWS).

AWS, which hosts companies including Netflix, Airbnb and the CIA, reported a 49% hike in sales in the first quarter to $5.44b. AWS made a profit of $1.4b – the majority of Amazon’s profits over the quarter.

The company’s success has allowed it to announce a big investment in Amazon Studios, its in-house TV production firm that makes The Grand Tour, presented by Jeremy Clarkson, and the dystopian series The Man in the High Castle.

Amazon is the world’s second-biggest company after Apple, with a market value of $723b. Many experts expect it to overtake the iPhone maker and become the world’s first trillion-dollar company. Analysts at Credit Suisse believe Amazon’s shares – which have risen by more than 50% in the past six months – could soon hit $1,800.

Two new appointments for Bandai UK sales team

John Carlaw joins Bandai as national account manager, and Joanne Airey takes on the role of key account manager.

John will join the team this month, bringing with him 17 years of knowledge. His most recent role was senior national account manager at HTI, and previous roles include senior buying manager for boys at Tesco together with retail roles with M&S, Virgin and Woolworths. John will be focusing on growing existing accounts and taking them forward into autumn 2018 and beyond.

Joanne comes with 17 years industry experience, having previously worked as a national account manager for Plum Products and as key account manager for Rainbow Designs. Since joining Bandai earlier this year, Joanne has already opened new accounts and extended distribution within the key account base, and her focus will now be to explore new business opportunities.

Amy Saunders, head of sales, Bandai UK, commented: “We are thrilled to have John and Joanne join the company at this busy and exciting time. With our portfolio growing year on year, it’s essential to have a strong team helping to drive the business forward and the experience that both of them can bring to the company is the perfect way to achieve this.”

MGA Entertainment awarded $1.1m from counterfeiters of L.O.L. Surprise!

MGA was granted default judgment of $1,171,500, and a permanent injunction against 81 counterfeiters.

The default judgment and permanent injunction follows a preliminary injunction granted in January 2018, and a temporary restraining order granted in December 2017, that enjoined all defendants from selling L.O.L. Surprise! counterfeit products on digital marketplaces Alibaba.com, Aliexpress.com and DHGate.com, and froze the defendants’ bank accounts. The default judgment now permanently prohibits the defendants from any further sales of L.O.L. Surprise! counterfeit products. In addition, the financial institutions that the defendants used for counterfeit sales, including PayPal.com and Alipay.com are to immediately turn over any funds previously frozen by the Court’s December 2017 asset freeze.

Isaac Larian, CEO of MGA Entertainment, commented: “With this ruling, we have successfully protected our brand and intellectual property from counterfeiters looking to defraud consumers. This judgement is significant, declaring loudly that we will stop at nothing to prosecute any and all counterfeiters to the fullest extent of the law. Criminal activity of this nature has no place in the toy industry, and I’m very pleased with the court’s decision.”

“MGA Entertainment continues to track down all manufacturers and suppliers in China that provided defendants with counterfeit L.O.L. Surprise! products, and is taking all legal action to close down any such manufacturers and suppliers it identifies. To aid in our continued prosecution of counterfeiters that sell and/or distribute counterfeit goods, MGAE is proud to announce the issuance of US Patent 9,931,579 B1, covering the unique and original attributes of our L.O.L. Surprise! product, including the ball itself. Our new patents will be aggressively used to defend the L.O.L. Surprise! brand and pursue infringers in the United States.”

Isaac continued: “The fight against counterfeiters does not stop here. We will continue our work to protect consumers and seek justice against any criminals creating or distributing fraudulent knock-offs. Our IP portfolio will be enforced whenever and wherever possible with retailers, including ecommerce sites, who infringe upon our intellectual property rights.”

Orchard Toys receives praise for its Free Parts and Replacement Service

Following coverage in The Metro, the new service has received positive feedback from customers on social media.

Customers have praised Orchard Toys’ Free Parts and Replacement Service, which aims to reduce waste whilst delivering first-class customer service.

The manufacturer has offered to replace missing game parts for a number of years, a free service that also raises money for its nominated local charity EACH (East Anglian Children’s Hospice).

Customers can request up to three missing games pieces via an online form. On receipt of their free of charge pieces, they are invited to make a donation to the charity via the company’s Justgiving page, which in the past two years alone has raised over £3,000 for EACH.

Marketing manager Ali Brown commented: “We are delighted with the enthusiastic feedback we are receiving about the service and Orchard Toys as a whole… it’s simply a win win for us. We are increasing brand loyalty by satisfying our customers, we are reducing waste and raising money for an amazing and very worthwhile local charity. As a result of the social media activity we have seen a 50% increase in Facebook followers and a phenomenal response in comments, likes and shares.”

Barbie softens Toys R Us effect for Mattel

Company reduces the effect of Toys R Us’ demise with the Barbie brand’s best growth on record.

When excluding $30m of sales lost in the liquidation of Toys R Us, Mattel’s latest results show that revenue rose 2%, fueled by the toymaker’s biggest brand. Barbie sales surged 24%, marking the second straight gain after a rough stretch and the best quarter since at least 2009, when Mattel started releasing its figures.

“We’re off to a strong start,” Joe Euteneuer, chief financial officer, said in an interview. “Getting to sales growth of 2%, excluding Toys R Us, is a big deal, given where we were last year.”

Barbie’s strength helped Mattel’s biggest properties – which also include Hot Wheels, Fisher-Price and Thomas & Friends – grow a combined 2% during a quarter when the world’s largest toy-store chain announced the shuttering of operations in the US and UK.

Shares rose as much as 5.5% at 4:09 pm after the close of regular trading in New York.

“Barbie and Hot Wheels are just flying off the shelves,” Joe said. “We’re spending more time trying to figure out how to manufacture more.”

Revenue of $708.4m beat analyst estimates in the first quarter, despite a 4% decline from the previous year. Analysts had projected sales of $689.8m.

The company’s adjusted loss was 60 cents a share, excluding some items mostly tied Toys R Us. Analysts had projected a loss of 40 cents. Mattel also reported bad debt expense tied to the retailer of $57.3m.

Ynon Kreiz, who became the new CEO of Mattel yesterday after Margo Georgiadis stepped down last week, said in a statement: “While Toys R Us will present a near-term challenge, our transformation plan remains our focus. We continue to see strong momentum in our key power brands.”

Mattel took the biggest hit from Toys R Us in North America, where sales fell 5%.

Geomag partners with Daniel of Windsor

Geomagworld SA has teamed up with AIS member Daniel of Windsor, to create a Geomag store.

Featuring all Geomagworld ranges, the store also offers customers promotions and play tables to encourage active model making and enjoyment of the products.

Situated in the new Science area, the STEM features of Geomagworld are an ideal fit in this engaging and educational area of the store.

Geomagworld marketing manager Nikki Jeffery commented: “We have an amazing display now in one of the South’s biggest toy departments and we are very grateful to the Daniel toy team for the opportunity. With over 120,000 visitors expected in Windsor for the royal wedding, the timing couldn’t be better.”

Just call me Sherlock…it’s the Friday Blog!

Saturday morning is normally quiet on the email front, as indeed it should be – Saturday morning is for tinkering with your Fantasy Football team, not proper work. Switching my mobile on last Saturday morning, I noticed that I had received an unusually high volume of emails (and not just people begging me to stay on their digital mailing list), including several from contacts at Smyths. Aha, I though, something has happened: just call me Sherlock.

Indeed, something had happened, at 5 am that morning to be precise; Smyths had acquired the Toys R Us operations in Germany, Austria and Switzerland in a deal worth around 80m Euros. It was a big, bold, brave move, illustrating the extent of Smyths ambition to grow its business beyond the UK and Ireland. At a stroke, the agreement created the largest specialist toy retail operation in Europe. The stores will be rebranded using the Smyths name, while existing employees and management have been retained. I am sure that employees – not to mention suppliers across the region – are delighted with this development, and so they should be.

The deal offers yet more proof of the strength of the UK toy retail channel, especially those independently-owned operators. As one general manager wryly pointed out to me: “If you listen to Argos, Tesco, Amazon and the like, there is apparently no profit in toys.” I think this move suggests otherwise. Nor do I suspect this will be last example of a successful British toy retailer expanding its horizons this year…

With the Fairfax acquisition of Toys R Us Canada and the imminent sale of its Asian operation, Toys R Us clearly isn’t going to disappear completely from the global retail landscape, although it finally closed the doors of its remaining UK stores this week. I recently came into possession of the Toys R Us creditors list, and as I suspected, it makes fascinating reading. Rather than dwelling on the amounts owed to individual suppliers, I wanted to mention a couple of other things that stood out. Firstly, the eye-watering sums paid to lawyers, administrators and other companies involved in the winding down process. It is only when you see it written down in black and white that the true scale of their charges hits you. £56,000 for a PR company for four months. Let that just sink in for a minute. £56k…for what exactly? Sending out a couple of press releases saying that stores would be closing and saying “no comment” when someone asks them a question. It simply beggars belief. On a lighter note, I noticed that the administrator is having problems selling one specific store as it has been occupied by squatters. How very British…

In fairness, the winding down of the TRU UK operation has, on the whole, been orderly and clean, and its impact on the broader UK toy retail market has been relatively minimal and short-lived. Contrast this with what’s happening over in the USA, where I was tipped off about a new strand of the liquidation process I’d not come across before: an ‘augmented liquidation sale’. Essentially, a liquidator has acquired the rights to sell the remaining inventory in the TRU stores. As part of the deal, said liquidator can basically do what it likes with the stores. So, in addition to the existing TRU merchandise, it has ordered in millions of additional clearance products, which has been arriving pre-priced at store level. Now, there is no suggestion that this approach contravenes any laws; however, it is potentially going to saturate the market (“with absolute crap,” as the supplier who told me about the move described it), which will inevitably impact other retailers. We avoided this very scenario in the UK, as TRU wasn’t overburdened with stock post-Christmas, so you have to feel for US retailers, who can do nothing absolutely nothing about this dubious practice.

And it’s not just US retailers that are unhappy with the TRU situation; it was announced this week that $156m had been set aside to pay suppliers for merchandise shipped after the bankruptcy filing last September. The problem is that vendors are collectively owed $760m, so there is a huge disparity between what is owed and the money available to pay the bills. Some suppliers thought that their debts would be covered by the $3bn bankruptcy loan, but a court has confirmed that priority is being given to lenders, lawyers and all the other companies which cluster round a bankruptcy like vultures around a carcass. What a mess.

Elsewhere, Hamleys’ Chinese owner is in talks to buy a stake in House of Fraser; Character Options has released a very respectable set of half year results and Vicki Marler-Hausen (nee Elmer) has parted company with Bladez – we’ll be bringing you details of what she’s up to early next week.

Finally, with Mattel CEO Margo Georgiadis being replaced by Ynon Kreiz last week, the rumour-mongering analysts were out in force. As Ynon has previously been involved in selling a couple of businesses to Disney (Fox Kids Europe and Maker Studios), the ‘experts’ were quick to add 2+2 and decide his appointment increased the possibility of the sale of Mattel to a third-party. Except, I’m really not sure it means that at all. If a sale genuinely was imminent, why go through all this top-level upheaval in the first place? And why sign a 10-year lease on a brand-new warehouse in Leicester? Mind you, wait until the analysts find out that the warehouse sounds like it is named after a Hasbro product – Optimus 205. I bet they’ll have an absolute field day with that!

Have a great weekend, see you at the plaY-room show if you’re going on Tuesday.

Brainstorm launches StikBot Dinos

A new Dino themed TV ad will broadcast from the beginning of June and will be at the forefront of its marketing efforts.

The StikBot Dino range is made up of the StikBot Mega Dinos – three Dinosaur breeds (T-Rex, Carnotaurus and Brontosaurus) that are bigger than any other StikBot released before. Not only will they allow children to create unique animations with the StikBot app, the Dinos come in red, green and blue so kids can create their own dinosaur collection.

Featuring even more Dino breeds, a specially created CDU contains all 24 blind StikBot Dino Eggs with one rare Dino in every 24. This pocket money version of the range will allow children to experience everything the StikBot range has to offer in terms of imaginative play, and learning how to create their very own stop-frame animations using green screen technology. Children will also be able to enjoy the multitude of StikBot videos on the StikBot Central YouTube channel, as well as uploading their own videos.

Nick Saunders, sales and marketing director at Brainstorm, commented: “Early sales of the StikBot Dino range have been extremely positive, and we are already taking more orders for the second wave, so we would ask customers to get orders in early.”

Jakks releases Q1 results

Shortfalls caused by the Toys R Us bankruptcy offset by strong sales in Incredibles 2, Squish-Dee-Lish and DC Toddler Dolls. 

Net sales for the first quarter were $93.0m compared to $94.5m reported in the comparable period in 2017. The net loss attributable to Jakks Pacific for the first quarter was $36.2m, or $1.57 per diluted share.

Jakks chairman and CEO Stephen Berman commented: “We are relatively pleased with our sales in the first quarter despite the negative impact caused by the liquidation of Toys R Us which began near the end of the quarter. Despite this sales disruption, we saw several areas of strength, including Incredibles 2, Disguise Costumes, Tangled: The Series, Squish-Dee-Lish and DC Toddler Dolls.”

“The investments in C’est Moi and Morfboard are off to a great start and sales are growing rapidly week after week. Our Morfboard product line, for example, has become the No. 1 selling scooter at Target, and we are seeing strong upselling in various components and accessories both in store and online.”

“As we look ahead to the next few quarters, we will continue to focus on margin improvement and our long term strategic goals. Our fall lines are moving forward as planned and we have a strong line-up of new product introductions that are a balanced mix of owned IP and licensed brands, including Morfboard Xtensions, Real Workin’ Buddies Mr. Banks, Pop A Zit, Fancy Nancy, Harry Potter, Incredibles 2, and Mega Man.”