Thank you for all of your positive comments about my two Hong Kong Blogs. If you missed either, you can catch up with part one here and part two – a piece which focused on the current state of play in the licensing arena, based on numerous conversations I had with licensees and retailers last week – here. Both were unvarnished, ‘warts n all’ accounts of how people were feeling during my trip, with the licensing piece in particular being something of a ‘light blue touch paper, stand well back’ sort of article. Ultimately, I strive to write honestly and from the heart, in the hope that what I have to say resonates with people. I got a lot of very interesting interaction and feedback to both pieces, so hopefully they struck a chord with the toy and licensing communities (and didn’t ruffle too many feathers in the process).
This week has seen a selection of UK retailers releasing their festive trading statements – once again, the results ran the entire gamut. Let’s start at the disappointing end of the spectrum: video game retailer Game’s sales fell, while The Works’ losses widened further. Marks and Spencer announced the closure of 17 stores, which will affect over 1,000 staff, while Build-a-Bear Workshop cut its full-year sales forecasts, announcing that it expects sales outside the US to be down in the region of 17-20% – with the decline “largely isolated to the UK.” Meanwhile, in the ‘not too shabby’ category, Primark’s sales were up, although its like-for-likes dipped, while Beales revealed that it increased sales by 3% in December (although I’m not sure where the November numbers ended up, which might be useful for context).
And then, there are the seasonal winners: Shop Direct had a phenomenal Christmas, with toy sales outstripping the etailer’s overall strong performance: while Shop Direct posted a 3.7% increase (with Very ending up + 8.8%), I saw a tweet which quoted Shop Direct’s overall toy sales as being up 20%, and 33% up at Very. Given the prevailing trading conditions, that is a stellar performance. B&M also enjoyed an extremely strong festive season, with Simon Arora quoting the run-up to Christmas as “a pleasing finish to the year.” December sales were up by 4.5% to £874.5m, and with B&M on track to open over 50 new stores this year, 2019 looks likely to see the retailer’s momentum continue unabated.
Finally, we come to The Entertainer, and perhaps the most stellar performance of all, considering it is a specialist, single category retailer. In the five weeks leading up to 29th December, the company posted a whopping 22.4% increase in total sales, with Saturday 22nd December being the largest trading day during the period. Total like-for-like sales over the same period grew by +13.5% with stores +13.0%, total online sales +17.1% and the retailer’s own website, TheToyShop.com, +51.5% following its successful re-platforming earlier in the year. Whichever way you look at it, these are mightily impressive figures. I couldn’t immediately talk to Gary Grant about it, as he is away in the Antarctic without wi-fi (I promise I am not making this up – this is verbatim what he emailed me to say yesterday. I’m assuming it’s a holiday rather than researching new international markets, but if he starts buying up all the penguins at Toy Fair next week, I might think again).However, I am sure that he is delighted with the performance and proud of his whole team for helping to delivering these numbers.
The thing that unites these retailers – apart from the fact that they all gave exclusive interviews to Toy World in 2018 – is the fact that they each do what they do well…very well. All of these players have a different strategy and approach, but each has carved its own niche in the market and each plays to its core strengths. I believe this is one of the keys to success in the current economic landscape, whatever business you are in: know what you do best, recognise where you fit in the grand scheme of things, understand your customer and deliver the best possible experience for them. It really isn’t rocket science.
As someone wrote in an email to me earlier this week, after reading the Hong Kong licensing Blog: “Licensing isn’t the golden ticket. Innovation isn’t the golden ticket. You’ve got to be working as an all-rounder today to make things happen and the ‘old guard’ are under pressure as the old formulas aren’t working. A new licensed entrant Fortnite turns up in the last 8 weeks and nails 44 weeks of sales – it isn’t ‘normal’. Retail changes on a vast scale – it isn’t ‘normal. Brexit unknowns – it isn’t ‘normal’. Anyone who comes into this business today isn’t ‘normal’, yet it can be the most exhilarating business challenge/experience out there!” I couldn’t have put it better myself.
2019 isn’t going to be a walk in the park, that’s for sure. In an interview with The Guardian this week, Gary Grant said:” We believe in the High Street, it is nowhere near dead. Going into 2019, we are as optimistic as we can be with Brexit looming.” I suspect that caveat is going to follow a lot of pronouncements over the coming months. In part, preparation will help: The Entertainer has doubled the number of containers it usually brings in at this time of year, stockpiling product to ensure seasonal stock is in place before any potential hold-ups at ports. I suspect many other retailers will be doing the same. However, preparing for an unknown future with many variables isn’t easy – to some degree, we’re all shooting in the dark.
All we know is that uncharted – and potentially quite choppy – waters lie ahead. That said, those companies which do what they do well should be fine. I sometimes feel like sending a ‘get better soon’ card to certain people – not because they’ve been unwell, just because they need to get better at what they do (such as the PR who recently sent us a release about a ‘sort after’ brand!). I’m proud of the Toy World team – they all worked extremely hard to publish a bumper 286 page Toy Fair Preview issue, which landed on desks on 31st December. Contrast that with one of our competitors, whose ‘preview’ issue is now a review issue, as it still hasn’t arrived – and the majority of people won’t be in their offices after today, as they’ll be heading to the show. Que sera sera, I guess that’s for them to defend: just as consumers vote with their feet when it comes to which retailers to buy from, toy companies will do exactly the same. At the moment, whatever business you’re in, you just can’t afford to drop the ball like that. We’ll just carry on doing what we do, and doing it well: hopefully that will stand us in good stead. See you next week at Toy Fair – as ever, it’s going to be a thrilling ride, and I for one can’t wait.