As the retail world continues to grapple with the slings and arrows of outrageous fortune (or 21st century consumer behaviour as it is otherwise known), there are times when you have to wonder at the absurdity of it all – such as how Mothercare managing to ‘overlook’ the fact that one vital strand of its CVA hadn’t actually been approved by creditors. According to the BBC, KPMG “got their sums wrong” – which is quite a staggering statement in itself. It was all the more embarrassing because this only came to light after the retailer had triumphally announced last Friday that lenders had backed its restructuring plan.
However, it turned out that the proposal for the Children’s World division had not actually been approved by the necessary 75% majority – essentially, landlords scuppered the deal. So now, Mothercare is in the position of having to reconsider its options, including closing the 21 stores that come under the Children’s World subsidiary, putting a further 300 jobs at risk. Remind me again how much KPMG charges for its services…?
I’d also love to have been a fly on the wall at the recent ELC suppliers meeting…despite everything that has been happening, I still feel the brand has equity and value. The question is, at what stage does a brand’s value start to wain in proportion to the amount of mud it is dragged through? For example, take Toys R Us: this week it has emerged that the lenders collapsed talks with an interested party (private equity firm Sycamore Partners) in February, because they believed they would make more money selling off assets via liquidation. This is clearly extremely sad, but will it also turn out to be a misjudgement? You have to wonder whether the TRU name is worth less now it is inextricably associated with failure? Woolworths, BHS and other ‘names’ never ended up being successfully resurrected after the stores closed and as each day passes, its value arguably decreases. The auction of the brand names begins in 10 days’ time – we’ll see then whether the lenders’ calculated gamble pays off.
Although maybe I’m wrong – a potential saviour has emerged in the past few days in former chief executive Jerry Storch; the New York Post has reported that he is in talks with several venture capitalists to buy the name and potentially some TRU stores. Is there a final twist in the tale? We’ll see in the next couple of weeks.
Meanwhile, US TRU workers continue to protest that the severance pay they were initially promised has never materialised. 30,000 staff will get nothing, while Dodgy Dave Brandon and four other directors have walked away with millions, paid a week before bankruptcy was announced. Staff will also lose their medical insurance 13 days after their employment finishes; for some, the cost of short-term cover could be equivalent to doubling their mortgage payments. To quote the famous philosopher Homer Simpson: “Weaseling out of things is important to learn. It’s what separates us from the animals…except the weasel.” It has even emerged that Toys R Us had furnished its offices with $1000 chairs bought from an upmarket furniture supplier… of which Dave Brandon (yes, the same one) was a director. Absurd doesn’t begin to cover it: surely laws need to change.
Back here in the UK, retail turbulence continues, with House of Fraser announcing its painful decision to close 31 stores and the Poundworld sale on the verge of collapsing. High Street decimation was a topic on last night’s BBC Question Time, yet not one person brought Business Rates into the discussion – it’s almost as if politicians don’t really understand the problems (or the potential solutions).
Thankfully, there is some positive news to report: Dominic Geddes has joined HTi as non-executive director, a great move for both parties, while Toy Barnhaus will be opening its eighth store next week – proving that successful retailers can still thrive even in the toughest trading environments. Thomas Randrup has joined Schleich as country manager this week; hopefully his predecessor Jez Robinson, who left the business late last week, will find a new opportunity soon. Congratulations too to all the winners at last night’s Nickelodeon awards, including Sambro for its great new slime range, and The Entertainer / Addo Play, who won Outstanding Partner Initiative.
The Argos restructure is beginning to take shape, with Juliet Ward appointed to the role of Head of Toys, Nursery and Leisure for Sainsbury’s Argos. With previous experience at both Woolworths and Homebase, Juliet has spent the past few years heading the Argos Electricals team – there should be further news about the new toy team she’ll be leading in the near future, which will provide some stability and reassurance internally and externally as we head towards the festive season.
Indeed, I spent all of Thursday morning talking to a succession of radio presenters about Christmas, as the ‘voice’ of Argos’ campaign to launch its top toys list for Christmas. Did you know it was 200 days to Christmas yesterday? I didn’t, but I do now, having repeatedly discussed whether this was an appropriate time to start Christmas toy shopping (I find a bit of humour helps immensely). As for the list itself, there are many ways to view it; personally, I think it’s important not to take any individual top toys list too literally or examine every entry forensically. It’s about finding an angle; getting a message across and identifying clear themes and patterns that will resonate with consumers and – crucially – fit into five-minute radio segments or finite newspaper space. Looking at the volume of coverage the list received, it was very much job done – the Christmas starting gun has been fired. One interesting subtext was the appearance of just a single licensed product on the list – the Paw Patrol Fire Truck. All twelve other items were focused on innovations and trends. Next year’s list may well be very different, but for now, it’s very much a reflection of how buyers perceive the market.
Finally, social media threw up this gem of Peter Crouch and Abby Clancy’s baby looking remarkably like baby Jack Jack from The Incredibles – if you’re wondering why you haven’t seen Johnny in public before, we now know it’s because he’s still awaiting sign off from Disney’s approval process.