Monday 1st June – Latest toy industry reaction to coronavirus outbreak

Today, news from Argos, B&M, Debenhams, Harrods, the BRC, Cineworld and a new national day for Spain.

Argos has launched a new TV ad to appeal to customers during lockdown. A variation of the company’s well-received Christmas ad, which featured a father and daughter drumming to Simple Minds, the new ad uses Daniel Bedingfield’s Gotta Get Thru This. The song is accompanied by a compilation of clips of the public drumming along to the song using household implements and looks to create a sense of togetherness during lockdown as well as evoking brand familiarity.

The Crecer Jugando Foundation, linked to the Spanish Association of Toy Manufacturers (AEFJ), has suggested to the Spanish government that April 26th be established as Día del Niño (Children’s Day). This is the day that the children were first able to go outside again after lockdown. The foundation believes that such a day would recognize the sacrifices made by children during the period of confinement. As it is likely that toys would be purchased as gifts on such a day, the foundation says it would also highlight the importance of toys and playing to children’s well-being. The proposal references the United Nations General Assembly, which has previously urged countries to establish their own Children’s Day, a measure already adopted in countries like Germany, Portugal, Poland, Brazil, Argentina, Mexico and Australia, among others.

B&M has revealed a revenue rise of 22.7% during the first eight weeks of its financial year, which mostly covers the lockdown period. The company has seen “exceptionally strong” demand, with customers’ average spend much higher than normal, although they have visited stores less frequently.

Sales in some key categories were reported to have been brought forward, due to both the lockdown and warm spring weather in the UK. Gardening and DIY ranges performed particularly well, accounting for 10.4% of the increase, and although shopping trips were motivated by essential purchases, other categories benefited as additional items were added to baskets.

CEO Simon Arora thanked customers for their patience and consideration in observing social distancing, and thanked staff for their hard work, dedication and resourcefulness: “B&M is doing its bit in terms of keeping our customers supplied with the things they need week-in, week-out during this period of enormous disruption to the normal operation of the business. I am extremely proud of the way our teams have responded to the challenges involved in meeting demand at the same time as doing the right things when it matters, such as providing £2m of discount to NHS workers during the crisis and a £1m food bank donation.”

Debenhams has announced the loss of 1,000 jobs across its head office and store estate, as well as the closure of 17 further stores. Redundancies will be made in the company’s merchandising, buying, design and other administrative functions at head office, and in cafes and other services that will not reopen under social distancing rules in stores. Although the company had already announced the closure of its toy department, the move marks a further shift in the overall business model for the retailer.

A spokesperson said: “In the context of a retail industry undergoing profound change, the management team is working on the future shape of the group, with a view to exiting administration as a going concern. With a leaner and more flexible operating model, Debenhams will have the ability to adapt to what are likely to be fundamental shifts in the future trading environment.”

Cineworld has said that it expects government restrictions related to cinemas will be lifted by July and expects to open all of its branches, subject to confirmation of the schedule for film releases. Physical distancing rules will be enforced, with strict levels of hygiene to ensure “a safe and enjoyable cinema experience for employees and customers”.

The organisation has secured new funding via a waiver on the company’s loan covenant and has agreed £89.7m of extra liquidity through an increase in its revolving credit facility. Credit committee approval has also been granted to apply for additional funds through the Coronavirus Large Business Interruption Loan Scheme in the UK. The company said that these measures mean that there is “sufficient headroom to support the group even in the unlikely event cinemas remain closed until the end of the year”, although it awaits confirmation of exactly what films studios will release, and when.

As well as reopening its flagship London store in June, Harrods has announced the opening of an outlet shop to sell surplus stock from the restricted spring season. The new outlet will be based in Westfield White City and has been designed to allow more space for customers to shop safely.

“In the new world in which we find ourselves, the economy needs businesses willing to look at its business model and current operations and think differently to enable growth, while protecting its customers and employees,” said MD Michael Ward in a statement. “Harrods Outlet allows us to enable better social distancing across a larger footprint.”

The British Retail Consortium is working with the government and local authorities to establish clear plans on managing public spaces once shops begin to reopen from June 15th. Customers are likely to face queues outside most shops as the lockdown eases, and trade groups have asked small business minister Paul Scully for advice on how best to manage the expected queues. The BRC has called on the public to be considerate of staff and fellow shoppers, to follow signs and instructions and to maintain social distancing. There is concern that shopping centres and narrow streets do not have the space for single-file lines, and retail bosses have called on the government to reduce social distancing from two metres to one metre, as in some European countries, so that queues will take up less room.

The government has committed £50m to help councils in England introduce safety measures, but has stressed that shop owners and businesses, along with the public, have a shared responsibility to follow the advice on social distancing. Local trade groups and councils are working on plans to widen pavements, re-route foot traffic and pedestrianise some shopping areas. Many retailers will be forced to designate staff to ‘police’ queues, to help avoid conflict with neighbouring premises. In central London, the New West End Company has advised retailers not to run sales in the first few weeks and stagger opening times. Ticketing technology company Accesso has seen a noticeable increase in inquiries about its virtual queueing software, which allows customers to register at a business and return when they are notified by text that it is their turn to enter.

Ty Flippables Dinosaur in space launch

The sequined plush accompanied astronauts aboard NASA’s Crew Dragon.

Elon Musk’s SpaceX launched on Saturday from Cape Canaveral and was the first commercial spacecraft that has carried humans into space. The mission included a sequined dinosaur toy passenger, which joined the NASA astronauts onboard. Shortly after launch, the soft toy – a Ty Flippables Tremor Dinosaur – appeared floating around the cabin of the Crew Dragon in NASA’s live feed. A NASA commentator remarked: “Looks like we saw our zero-G indicator floating around there.”

Although many were surprised and amused to spot the dinosaur on board, It is not uncommon for a plush toy to accompany astronauts during launches, to help indicate when the spacecraft has reached zero gravity and astronauts are experiencing weightlessness.

The astronauts both have sons who were allowed to choose one of their toys to go into space and fulfil this important role, and the sequined apatosaurus was selected. Astronaut Bob Behnken commented: “That was a super cool thing for us to get a chance to do for both of our sons, who I hope are super excited to see their toys floating around with us on board.”

The Demo-2 mission was undertaken to show that SpaceX can transport astronauts to the International Space Station – and get them back – safely. It is the final step to allow SpaceX to become certified by NASA’s Commercial Crew programme for regular flights carrying astronauts to the International Space Centre.

The 6” dinosaur with blue/pink reversible sequins is a best-selling, yet retired line. Customers have already been trying to track down remaining stock or re-sale listings of the Flippable, and sellers on eBay have re-titled the item “SpaceX Ty Flippables Tremor Dinosaur Limited Edition” as a consequence. Whether this surge in interest results in the dinosaur being re-introduced into the Flippables range at a future date has not been confirmed by Ty, but it is surely a possibility?

Sword & Shield – Darkness Ablaze unveiled by The Pokémon Company

Charizard and Eternatus make their Pokémon VMAX debut in the new Pokémon Trading Card Game.

The Pokémon Company International has unveiled the newest expansion for the Pokémon Trading Card Game, Sword & Shield – Darkness Ablaze, launching worldwide on 14th August.

Sword & Shield – Darkness Ablaze introduces highly collectible cards including Charizard VMAX, as fan favourite Charizard makes its Gigantamax form debut in the Pokémon TCG, just like in the Pokémon Sword and Pokémon Shield video games. In addition, Trainers will be able to pull more Pokémon from the Galar region as Pokémon VMAX, such as Centiskorch VMAX and Grimmsnarl VMAX in their Gigantamax forms, and the Legendary Pokémon Eternatus VMAX in its unique Eternamax form.

The full expansion includes the following: seven Pokémon VMAX; 14 powerful Pokémon V, plus nine full-art Pokémon V; 17 Trainer cards and four full-art Supporter cards; and three new Special Energy cards

Fans interested in playing with cards from the expansion before launch can do so by picking up the Sword & Shield – Darkness Ablaze Build & Battle Box, available through their local participating Pokémon TCG retailer from 1st August. Each box contains four Sword & Shield – Darkness Ablaze booster packs, a 23-card Evolution pack featuring key cards from current and prior sets (including one of four alternate-art promo cards) and a deck-building tip sheet.

For additional information about the Pokémon TCG, click here.

Smyths Toys and Magic Star partner on exclusive Oscar deal

The collaboration will see a recording deal and brand partnership for the Smyths character. 

Smyths Toys and Magic Star, the children and family entertainment label of Sony Music, have partnered on a 360 deal for the iconic Smyths Toys character Oscar.

The deal is set to include media licensing, original animated video content, third party brand partnerships and consumer products. An album release will be produced by Blackbook Music, which also brokered the deal.

Oscar was created by Smyths in 2016, and has since featured prominently in a number of advertising campaigns alongside famous characters from kids properties, including Barbie, Buzz Lightyear and Woody. The character also appeared in the hit music video ‘If I Were a Toy’, which aimed to break down gender stereotypes.

Will Speer, head of Magic Star, said: “We are really excited by the opportunity to work with such a collaborative and forward-thinking partner as Smyths – there are so many possibilities for developing Oscar and bringing him to new audiences.”

Tony Smyth, managing director, Smyths Toys Superstore, commented: “We are delighted to see Oscar shine in his role as a music star and to work collaboratively with Magic Star and the great team there to make that happen.”

Anthony Andrews of Blackbook Music added: “Smyths is a market leader in children’s retail and Oscar is pivotal to its marketing strategy. Sony Music is the only major to have a dedicated kids and family label with Magic Star, so this seemed like a perfect fit. I’m excited to have facilitated the partnership as we build Oscar’s audience through morally responsible and aspirational kid’s content.”

August to see furlough scheme employers pay 20% of wages

Employers will also be expected to pay towards each worker’s National Insurance and pension contributions. 

Chancellor Rishi Sunak is expected to announce amendments to the UK furlough scheme which will see a rise in the cost to participating employers. Under the revised scheme, employers will pay 20% towards furloughed workers’ wages, in addition to their National Insurance and pension contributions.

The furlough scheme has been of vital importance to tens of thousands of employers during the coronavirus pandemic, as companies found themselves facing sudden and significant drops in income. Some 8.4m people are currently receiving payments through the scheme, while a further 2m are being supported by a separate self-employed scheme. It was announced in April that the scheme – which sees furloughed employees receive 80% of their wages, up to £2,500 – would be extended through to the end of October.

Although widely welcomed, the furlough scheme has made a major dent in government finances, coming in at an estimated £80b in total, according to the Office for Budget Responsibility. However, the announcement regarding employer-payments has triggered consternation among many, with fears the move could lead to redundancies as companies choose to lay off workers rather than contribute. A survey conducted by the Institute of Directors found that a quarter of employers using the job retention scheme said they would not be able to afford to make any contribution at all towards furloughed workers’ wages, even though half felt able to pay a 20% contribution from August.

Meanwhile, the government has yet to unveil an extension to the help for the self-employed, whose support is set to run out this weekend. A cross-party group of 114 MPs is urgently calling on the Chancellor to extend the provision.

Character Group publishes half year results

The company is looking forward to a strong autumn winter season.

The Character Group has published its results for the half-year ending 29th February 2020. While acknowledging that the decline in consumer spending in the UK toy market, the weakness of sterling and uncertainty over Brexit before the 2019 Christmas period had an adverse impact on sales, the Group remained strongly cash-generative throughout the period.

The onset of the global pandemic which has significantly impacted toy sector sales since March was also acknowledged in the report, however the results in the first half were largely unaffected by this factor. Revenue for the period dipped to £51.7m, while operating profits came in at £2.7m.

Standout performers during the six months to 29th February 2020 continued to include Peppa Pig, Pokemon, Goo Jit Zu and Little Live Pets, to be further bolstered by the exciting new launches planned for later in the year.

Having maintained operations to preserve the business-critical functions of the Group and to fulfil demand for its brands and products over the lockdown period, the business is now in a strong position to move on from the lockdown across all the markets in which it operates.

A statement accompanying the results said: “With the proven record of our operational management team to judge the market and swiftly react to the changing environment and conditions, we intend to be fully open for business and to re-establish our prior trading trajectory. With the quality of our brand portfolio, the strength of our customer relationships and the resilience of our cash-generative business model, the Board expects to achieve a profit in the second half and, accordingly, for the current financial year as a whole.”

Fresh collections unveiled at Toy Fair included exciting new distributor lines, as well as some key brands developed in house. Among the highlights are Gotta Go Flamingo, which joins the Little Live Pets range, with playful toilet humour that will appeal to kids. Squeakee the Balloon Dog and Laser Battle Hunters also promise to be major launches of the season, supported by significant global marketing campaigns.

The UK debut of Character’s own Shimmer ‘n Sparkle Instaglam collection is another major focus for Q4. This new property will have a global roll out in 2021 and already has further developments in the pipeline. Another new collection that has received a positive reception from the trade is the new high quality, sustainably sourced Peppa Wood Range, designed with a slightly younger Peppa fan in mind.

Character marketing director Jerry Healy told Toy World: “Together, these products and ranges present one of the most formidable collections that we have showcased to date. While no one is the industry can expect to make up the sales lost during the period of lockdown, with the quality of our brand portfolio, the strength of our customer relationships, the resilience of our cash-generative business model and strong balance sheet, Character expects to return to its normal trading pattern in time for the lead up to the all-important Christmas selling season.”

Thursday 28th May – Latest toy industry reaction to coronavirus outbreak

Today, the world of retail continues to adjust, Spin Master makes a sizeable donation, Lego looks to reopen attractions and Rubik’s brand ambassador keeps himself amused.

Shopping centre owner intu has announced that when its centres reopen, a one-way system will be in operation and the amount of people and cars in the centre at a time will be strictly controlled. Floor stickers and signs will direct the flow of shoppers and encourage social distancing. Some parking bays will be closed to limit the number of vehicles and ensure that visitors can park at a safe distance from each other, while hand sanitation stations will be available at entrances and throughout the centre. Centre staff will be given PPE and training to ensure visitors respect social distancing guidelines and escalators, toilets and keypads will be regularly and scrupulously cleaned.

Chief executive Matthew Roberts stressed the need for centres and retailers therein to work together: “Experts from across intu have formed a specialist taskforce which has considered everything we need to run intu centres as safely as possible. This includes working with our brand customers and providing them with all the support they need to reopen safely.” He also appealed to the public to comply with shopping guidelines. “We know we cannot do this alone and everyone who visits our centres, whether for work or to shop, will play their part in keeping themselves and each other safe.”

Although Halfords has been trading from many of Its retail sites during lockdown, customers have been served from a desk at the front of the stores with staff on hand to pick products, or hand over click and collect orders. The company is now set to re-admit customers to 53 of its high-street shops, with what it has described as a ‘retail lite’ model, following trials at the Peterborough and Bristol Cribbs Causeway branches. Being careful to enforce strict social distancing and hygiene measures, the company said there was ‘no timetable or deadline’ for its shop openings, explaining they will only happen once it is confident staff and customers can be kept safe. Marshals will be positioned outside stores to ensure customer levels are kept in check, and the retailer has installed ‘sneeze screens’ at tills. Customers will be encouraged not to handle or try out products in store.

Spin Master has donated almost 90,000 toys, plush, games and activities, at a retail value of approximately US $1m, to children in need in the US and Canada.

“During this difficult time, Spin Master remains committed to providing children with the opportunity to grow and learn through play, regardless of circumstance or setting,” said Ronnen Harary, co-CEO of Spin Master. “Together, with the help of incredible charitable organizations in the US and Canada, we can deliver inspiration, imagination and joy to children during this uncertain and stressful time.”

Charitable partners dedicated to the wellbeing of children have helped distribute a selection of Spin Master products to deserving homes. One of these is Make-A-Wish Canada, which thanked the company for the support: “Due to the Covid-19 pandemic, we had to postpone hundreds of wishes nationally, and this donation will help us bring extra smiles and hope to our brave wish kids waiting for their wishes to come true.”

As Denmark starts to ease restrictions, Legoland Billund and the Lego House are set to welcome back visitors.

The Lego House is scheduled to reopen on June 22nd. Lego has asked guests to “maintain good hand hygiene” and will provide hand sanitiser dispensers. Cleaning regimes have been intensified both during and outside opening hours, and hygiene procedures introduced for all employees. Brick containers within the attraction will be emptied and cleaned every day before being refilled with bricks which have been in 72-hour quarantine.

Equally stringent hygiene and safety measures have been rolled out at Legoland Billund. From June 8th, all visitors must have booked in advance (even those with annual passes) and the number of visitors at one time will be limited.

The attraction has confirmed, however, that the opening of new area Lego Movie World has been postponed until 2021, as work on the new rides had to be halted due to the Covid-19 outbreak. A statement to customers reads: “We know that you were looking forward to it as much as we were, and we are very sorry that you will have to wait a little longer for this exciting new feature. We promise that everything will be ready for 2021, and we also promise that it will be well worth the wait.”

Cementing its support for toy and entertainment industry charity Toy Aid, Rubik’s has revealed that brand ambassador Ernesto has created a Rubik’s cube mosaic. Using 648 Rubik’s Cubes, the mosaic has been widely shared on social media to raise awareness of the initiative, which is raising money for disadvantaged children, young people and their families.

Future Rays throws support behind Rays of Sunshine charity initiative

The ROS Toyz campaign aims to raise the spirits of seriously ill children by fundraising for toys and gifts. 

Future Rays, a committee of young professionals keen to make the world a better place, has announced its support for Rays of Sunshine, a UK-based charity that brightens the lives of seriously ill children by granting wishes and organising events and outings for children undergoing hospital treatment.

Due to the Covid-19 pandemic, much of the charity’s work has been stymied, and now it is calling on the toy community for assistance.

The new ROS Toyz campaign aims to help seriously ill children by raising funds to purchase toys and games for delivery to hospitals all around the country,
including GOSH, St George’s Hospital, the Bristol Royal Hospital for Children and Addenbrookes. The charity hopes to raise £10,000 to purchase 1,500 toys, which will go to more than 500 vulnerable and poorly kids.

Readers can support the campaign either by donating directly by clicking here, or by purchasing a toy (or two) from the ROS Toyz Amazon wishlist which can be sent straight to the children. Readers opting for the latter are asked to contact Rays of Sunshine to confirm the best delivery address.

The charity stated: “On behalf of Rays of Sunshine and the children, families and hospitals they help, thank you in advance for your generous support.”

BLE opens entries for License This! competition

Wynne-Jones IP returns as sponsor for a third year, as a raft of new judges join the 2020 panel. 

Brand Licensing Europe has opened entries for its annual License This! competition, which gives young brands and designers a much-needed leg up into the multi-billion-dollar world of licensing and brand extension.

The judges will be on the lookout for the very best entries in two categories – Character & Animation, and Brand & Design. Entrants can hail from anywhere in the world, but they must be unsigned, not working with an agent or have any retail deals in place. Entry is free here.

Finalists will be selected no later than 11th September. New judges for this year’s Character & Animation category include Ian Downes, founder of Start Licensing. Ian commented: ““Licensing is an industry that thrives on new ideas and fresh talent. It can be hard to break through sometimes, so a forum like License This! is a very welcome one as it shines a light on creativity. I look forward to seeing this year’s entries. Well done BLE for driving License This forward.”

The winner from each category will receive a free exhibition stand at BLE 2021, one year’s Licensing International membership, PR support, and invaluable advice from the panel of industry experts. In addition, all finalists will receive legal consultation from competition sponsor Wynne-Jones. Previous entrants – both winners and finalists – have successfully signed lucrative agent and licensing deals off the back of the competition and are championing fellow entrepreneurs to sign up.

Last year’s joint-winner, Rosie Brooks, added: “It was a really fun experience and it has opened so many doors for me already – I can’t wait for BLE this autumn. If you’re thinking about entering this year, all the judges I spoke to said it was about the potential of the idea rather than finished and polished product lines, so if you have an idea you think has the possibility to grow, make lots of prototypes: the more you experiment, the stronger the idea will become.”

To find out more, click here.

Trade between the US and Hong Kong under threat

US Secretary of State declares that Hong Kong is no longer autonomous from China.

As Beijing takes the controversial decision to impose a new security law on the territory, it has been revealed that Secretary of State Mike Pompeo said in a statement: “No reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground.”

The US Secretary of State has already informed Congress that he believes Hong Kong no longer merits special treatment under US law. This has potential major economic implications for Hong Kong’s status as a trade hub status and is likely to anger the Chinese authorities.

Mike Pompeo claimed that the new security law was “only the latest in a series of actions that fundamentally undermine Hong Kong’s autonomy and freedoms. It is now clear that China is modelling Hong Kong after itself.”

Hong Kong’s Chief Executive Carrie Lam has denied that the law, which could be in force by end of June, will curtail the rights of Hong Kong residents, however the plan has been widely criticised internationally.

Until now the US has granted Hong Kong special status under US law. The provision dates from when the territory was a British colony and means it enjoys favourable trading terms. Since last year, this status has been conditional on the US secretary of state regularly certifying that Hong Kong maintains sufficient autonomy from mainland China. Failure to do so allows the US Congress to revoke Hong Kong’s special trade status, which would mean treating Hong Kong the same as mainland China for trade purposes.

Such a move would jeopardise billions of dollars’ worth of trade between Hong Kong and the US and act as a disincentive for future investment there, a move which would have major implications for the toy industry. Mainland China would also suffer repercussions, as many transactions with the rest of the world are carried out via Hong Kong, which is used as an international base by many mainland companies.

Pro-democracy activist Joshua Wong has called on US, European and Asian leaders to reconsider Hong Kong’s special trade status under the new security law. He warned that once the law is implemented, Hong Kong will be assimilated into China’s authoritarian regime, creating “massive damage to expats and investors in Hong Kong” and said that maintaining the city’s autonomy was the only way to protect business.