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Trade secrets…it’s the Friday Blog!

Published on: March 1st, 2019

I mentioned the heightened secrecy measures in place at the New York Toy Fair in last week’s Blog, and subsequently heard about some shenanigans which explain why companies feel the need to take precautions. It turns out that one exhibitor was a victim of theft of prototype samples from the stand….after the show had closed! Parcels which had been left for Fedex to pick up and deliver to customers were ‘appropriated’ by two gentlemen, who it turned out worked for a competitor. Thankfully the whole episode was caught on CCTV and the guilty party has been barred from exhibiting in the future. My understanding is that the Toy Industry Association and Javits Security were incredibly helpful and vigilant in the apprehension of those responsible. But it just goes to show the lengths that some companies will go to – sadly, industrial espionage is still alive and kicking in the global toy community and the need for vigilance is real. On the subject of the New York Toy Fair, next year’s date moves a week later in the calendar – the new dates are 22nd-25th February. However, perhaps the biggest news from the US this week was the announcement of a delay in further Chinese tariffs, which was due to come into effect on 1st March. I genuinely think I heard the sigh of relief on this side of the Atlantic…

Back home, the fallout from the CMA report into the Sasda merger has continued. With many observers believing that the findings have effectively killed off the deal, speculation has turned to what happens next for the respective parties. Two particularly juicy rumours have emerged: the first suggests that US private equity company KKR – a key player in the Toys R Us debacle, as one of the owners which drove its collapse – could be interested in acquiring Asda. The second rumour is that Amazon is potentially considering an approach for Sainsbury’s. Whether there is anything in either story is hard to tell at this stage, although both are at least plausible outcomes. KKR’s track record in the toy market isn’t exactly covered in glory, so I imagine that Asda employees would be a little wary if that did turn out to be their fate. As for Amazon, it has been suggested that it could afford to buy Sainsbury’s “out of petty cash.” Another way of looking at it would be to say that the purchase would be funded by all the tax it has managed to avoid paying in recent years. However, if it does decide to move into the bricks and mortar arena, at least it will be liable for proper business rates at last.

On the subject of retail, this week has seen a spate of job losses from major retailers – and regrettably, I fear there may be more to come. Boots has announced that up to 350 jobs are to go at its head office in Nottingham, while I understand that the Tesco toy buying team was due to learn its fate in the past few days. I have also been contacted by a couple of well-known, experienced toy buyers looking for new challenges – former Freemans and Tesco toy buyer David White and Shop Direct’s Neil Mitchell. David recently moved on from his previous role at The Book People and is looking for a new opportunity in the toy buying sector. He can be reached at davewhiteapple@yahoo.co.uk or on 07908 153590. I was really surprised to hear that Neil’s role at Shop Direct had disappeared as part of a major head office restructure. Neil has worked in the toy team alongside Andrea Gornall for over ten years, during which time Shop Direct has become a pivotal account for many toy companies. Neil is hoping to stay within toy circles – either as a retail buyer, or in a sales or product role at a toy company – and he can be contacted on 07921 836945 or neilmitch1703@gmail.com. Hopefully they will both find new opportunities in the toy market soon.

This week has also seen the announcement that US toy company Skyrocket will be setting up its own UK operation, headed up by former Bandai sales guru Amy Saunders. The company has established itself in the UK market in recent years via successful brands such as Pomsies, Grumblies and Sky Viper Drones, and the new set-up will support further growth through new brands such as Blume, which created something of a buzz over Toy Fair season. We wish Amy all the best in the new venture.

Elsewhere, Asmodee has announced that it has entered into exclusive discussions to acquire the Searainbow group, which includes The Green Board Games Company and Lagoon games, while Funko has revealed that it will be opening its first standalone store in LA later this year, with further stores planned around the globe, including potentially one in London. We ran a story last week about a raft of US toy companies launching direct to consumer websites in the US, and along with brands opening their own stores, I wondered whether toy retailers would be happy with these developments. Interestingly, most of the feedback I received online indicates that moves like this are no longer widely perceived as a direct threat. Indeed, the press release announcing the Funko move specifically addressed this issue, suggesting that rather than trying to compete with its retail partners, Funko’s aim in opening stores is to build even more followers for the Funko brand, driving sales at all Funko stockists.

Finally, with all the talk of retail theatre being the key weapon in the fight against sales migrating online, I was pleased to see the Hamleys outlet store in Wembley Park going all out to create that all-important atmosphere of wonder and magic for store visitors. That said, I’m not sure that FAO Schwarz and its iconic floor piano has too much to worry about just yet…

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