Not going out … it’s the Friday Blog!

Traditionally, many people from the UK toy community would have been over in New York for the US Toy Fair this week. But with the North American trade show landscape currently in a state of flux, we find ourselves without a US-based Q1 show for another year, before it is scheduled to return to New York in early March 2025. I am sure that’s a subject I will return to in future Blogs, but for now, one of the positives from everyone not being out of the office for another week is that all the follow up from Toy Fair Season gets done just that little bit quicker (although here in the UK, half term certainly doesn’t help).

Achieving a happy equilibrium between seeing the people you need to see and doing the things you need to do is a constant balancing act for everyone in the global toy community across Q4 and Q1. I was speaking to someone this week who told me he had a fantastic London Toy Fair, although he had been disappointed that several retailers had cancelled previews with him in December. I asked him if he felt the two were connected, and it did get me thinking: there was a tremendous retail turn-out at Toy Fair this year, and I do wonder if it makes sense for retailers to maximise their time by seeing 40-50 people over three days in London, rather than visiting individual companies for previews in Q4.

I appreciate that trade shows and previews are two entirely different things, and that having a buyer visit your office for a preview for half (or a whole) day is a dream for suppliers. But equally, Q4 is a markedly different trading landscape these days, with buyers needing to be highly reactive to dynamic pricing, stock fluctuations, marketing activity and many other facets of modern retailing – and it is harder to keep on top of all that if you are constantly out of the office all day at previews in the run-up to the festive season.

In the past, much of the retail reactiveness would come the minute the Argos catalogue launched, or when a Christmas flyer landed (which was why so many sales directors went on holiday when the Argos catalogue launched, to avoid being shouted at down the phone by certain accounts). Now, pricing can change on a daily basis, sometimes several times in a single day. A bit like monitoring the stock market, it’s a constant and ever-changing process. I am sure previews will continue, but I got the sense last year that fewer toy companies were block booking whole months out for previews, and I do wonder if buyers will focus more on concentrated events like LA, where they can see a large number of companies in a short space of time, rather than visiting individual companies at their offices throughout November and December– although I’m curious to hear what other people think.

Even though there is no event in New York this week, it remains the time of the year when the big toy companies announce their Q4 and full year results (I wonder if they will postpone them to coincide with the New York Toy Fair next year or keep them in the middle of February?). This week has seen Mattel, Hasbro and Spin Master unveil their 2023 figures: the pattern that generally emerged was of a challenging year which was mitigated by a strong finish to the year in Q4. Mattel and Spin Master in particular can take comfort from their respective Q4 performances, driven by key evergreen brands and new launches, which sets both companies up nicely for the year ahead. Hasbro’s Q4 numbers didn’t quite come through in the same way, but Furby was certainly a bright spot, as was the performance of Wizards of the Coast across the whole of 2023.  There are some excellent new launches for ’24 which we saw in Nuremberg, and hopefully it’s now a case of drawing a line under last year and moving onwards and upwards.

Back in the UK, I was very sad to report the sudden, untimely passing of popular sales agent Mark Sharp at the end of last week. The huge number of heartfelt comments on my LinkedIn post reflect just how well-loved and respected he was amongst his industry peers, colleagues and customers. Our thoughts are with his family at this very sad time.

Elsewhere, there have been reports that the Very Group owners the Barclay family are exploring options to sell the business. Very is said to have approached several private equity firms to sound out their interest, but the owners have allegedly put a “hefty” valuation of £4b on the company and are said to be unwilling to budge, leading some to speculate that a sale is unlikely. Meanwhile, the new Asda owners have been grappling with the first-world problem of whether it is acceptable to borrow millions from the parent company (EG Group) to pay down debts incurred on buying not one but two private jets (I love the fact they couldn’t share one, but each had to have their own. Perfectly normal behaviour). After all, it’s not as if their debt-laden takeover of Asda has come under government scrutiny recently. Oh wait…

Finally, it has been announced that Jazwares has decided to take legal action against Build-a-Bear, which it has accused of “copying the look, feel and tactile design” of Squishmallows. To be fair, I saw numerous ranges in both London and Nuremberg which – one could possibly argue – are also sailing very close to the wind in that regard, so it will be interesting to find out in the fullness of time why Jazwares chose Build-a-Bear to go after. Maybe on this occasion the design has finally crossed the line, or maybe Jazwares feels it will garner more publicity to go after a big name like that, which in turn may scare others off without the need for legal action. Perhaps there is a perception that Build-a-Bear has deep pockets and is therefore a more attractive target? Whatever the rationale, I bet there are a few toy companies which will be nervously checking the post every morning just in case they’re the next in line for a letter from Jazwares’ solicitors…

How to win friends and influence people… it’s the Friday Blog!

I was due to visit Spring Fair this week, but sadly I was struck down with a post-Nuremberg lurgy (Nuremblurgy? Nurembug?), so I wasn’t able to make it. Thankfully, another member of the Toy World team was able to make the trip and reported a steady show, with several toy exhibitors happy with the level of retail interest. The dedicated Kids & Play section seems to get smaller every year, but there was also a healthy representation from toy companies in adjacent halls so, overall, there is still a respectable presence from toy companies looking to reach different retailers – small gift shops, garden centres, zoos, theme parks etc – than the accounts that come to London Toy Fair. It’s not for everyone, but for those with the right product (and the right margin capacity), there are certainly opportunities.

However, unfortunately not every visitor had a positive experience. Midco Toys’ Dave Middleton might have thought that winning the Independent Toy Retailer of the Year award would see suppliers welcoming him with open arms (that and the fact he’s a successful retailer who can shift decent volumes of product), but one particular Spring Fair exhibitor obviously didn’t read the script. If you didn’t read Dave’s LinkedIn post about his experience, it is well worth checking out. Essentially, the tl:dr is that Dave was treated appallingly by the reps from Jellycat, who made it abundantly clear that they didn’t want to engage with him in a prolonged, fairly unpleasant exchange. I have to be honest and say I wasn’t surprised when Dave told me what had happened: this company has ‘previous’ for excessive snobbery and rudeness. I gave up even bothering to try to talk to them years ago. Under Dave’s post, which has been viewed by over 30,000 people, there were numerous comments from people who have had a similar experience with this particular company (it’s obviously part of its DNA), plus a neat Mean Girls reference from Dave, and Vivid’s Darrell Jones comparing Dave to Julia Roberts from Pretty Woman…seriously, it really is worth reading the entire thread.

I genuinely struggle to comprehend why anyone would pay £50k++ for a stand at a trade show to adopt a sales prevention mentality and tell people they can’t open an account unless they practically beg. Maybe it’s a reverse psychology thing – treat ‘em mean, keep ‘em keen? Perhaps that used to work in the bad old days, but I’m not sure it’s still a winning strategy.

And what must the show organisers think – they can’t be happy with visitors having such a bad experience. I appreciate that the Jellycat team can run their business however they see fit – that’s their call. But given all the bad publicity that has followed one poor interaction (30,000 viewers and counting), I would be amazed if the company didn’t revisit its trade show policy. And if they don’t, I am sure they will reap what they have sown. I suggested a few weeks ago that I would periodically be highlighting disappointing behaviour by retailers under the ‘twit of the week’ heading (I gather the inaugural inductee was apparently less than thrilled with its nomination, but when asked “but did you do it?” had to admit it was all true). Although not a retailer, I think Jellycat has fully earnt a place in the ‘twit…’ hall of fame this week. Inspired by Dave and Darren, I’m also going to throw in a pop culture reference of my own: “Jellycat, Jellycat, what are they feeding you? Jellycat, Jellycat, it’s all your fault.”

Another retailer who – going on past form – is almost certainly going to be in the running for a ‘twit’ nomination on a semi-regular basis is our old friend Amazon, who this week has been warned by the government to unfreeze seller funds it has been withholding as part of campaign of stricter VAT checks. In theory, this whole matter should be relatively straightforward. All online sellers should pay VAT where legally applicable – if not, they are avoiding / evading tax and negatively impacting the NHS, education, family support, roads, infrastructure projects and a host of other areas where government funding is essential. That said, the process for Amazon to check this should not take as long as it is doing – it doesn’t seem that a sufficiently rigorous process is in place, or there aren’t enough Amazon employees to implement it. I have a VAT number and records of quarterly VAT returns that can be provided in minutes – how can the validation process take as long as four months? I was contacted by several toy companies saying they have had substantial amounts withheld for prolonged periods, and who have even received threats of account closure – in one case, because a company tried to add a new employee to the portal and his ID was rejected. Frankly, that’s just not good enough. Three words Amazonians: Sort. It. Out. Or you’ll be next into the ‘Twit’ Hall of Shame.

Thankfully, not everyone has had a bad week. Mattel must be delighted with its Q4 and annual results, which were unveiled a few days ago. While the US market declined -8% in 2023 and the major European markets were down -5%, Mattel had a stonking Q4 (+16%) which saw it end the year flat – and as I said a few weeks ago, “flat is the new up” (apparently someone quoted that phrase to Circana in Nuremberg last week, so it’s good to see some people are keeping an eye on my ramblings).

The Toy Association is also emerging from a turbulent period, with fresh impetus and new directions. I caught up with Interim president Andy Keimach this week, after the news that the Association has secured a building in LA from which toy companies can conduct previews in September. As Andy described it: “this year is a test drive to a permanent solution for both April and September moving forward.” It seems like the LA juggernaut won’t be slowing any time soon, and El Segundo will be its epicentre. Heck, I may even need to go along for the ride, although I do wish something could be done to streamline and solidify the dates. Most of us – including the people in the buildings that are springing up in El Segundo, plus retail and distributor visitors – will find it difficult to be there for 3-4 weeks (or more), and most of us are struggling to find where the sweet spot is when the greatest number of people will be around. Hopefully all will become clear in the fullness of time…

Planes, Trains and Automobiles part 2 … it’s the Friday Nuremblog!

Another early Friday start for me, in an attempt to summarise what we’ve seen over the past few days in Nuremberg. My ability to craft a carefully honed piece of prose in the early light of dawn has not been aided by a bizarre journey home last night, which saw 300+ passengers (surely every single one from the toy community?) on the British Airways flight to Heathrow stuck on the plane for 45 minutes before being allowed to disembark – or to put it another way, half the time it took us to actually fly from Germany. A series of unfortunate (and frankly laughable) events saw BA’s reputation for efficiency in the mud, and I fully expected the line of BA employees standing on the tarmac to direct us the ten or so metres to the terminal (apparently we couldn’t be trusted not to wander into the path of a passing 747 by ourselves …) to be wearing full clown costumes, complete with wigs and red noses. Sadly not. Mind you, at least we didn’t get to Frankfurt last night only to discover there were no planes taking off due to a security staff strike, as some people did. The week started with a train drivers’ strike in Germany and ended with travel chaos whichever way you turned – but hey, at least the bit in the middle was great.

Following hot on the heels of London Toy Fair, Nuremberg gives the toy community another chance to meet up, review line plans and finalise selections for the year ahead – only this time it was the global toy community rather than mainly UK participants, and the distances between meetings saw everyone’s step counts explode. My Tuesday schedule was particularly brutal: I seemed to go from one end of the showground to the other, then back to where I started (12 to 4A, rinse and repeat), as if I was on a giant bungee chord. I don’t know which idiot sorted out my schedule, but when I find the person responsible, I will be having strong words. Oh wait, that was me…

We saw a wealth of compelling new products, although I signed multiple NDAs, so can’t yet share some of the great things we were shown. Hopefully it won’t be too long before we can talk about them. There was the usual moaning from retailers about the lack of an emerging craze, but unfortunately they can’t be magicked out of thin air – they come when they come. In the meantime, there were lots of strong new launches to appraise. As predicted in our Hot Properties article in the January issue, Stitch was everywhere (literally), while if you didn’t know what an Axolotl was before, you certainly will now.

It’s difficult to say anything about footfall and attendance numbers, as the show is still going on today and tomorrow. People were muttering about it being quieter, with a variety of yardsticks given to justify the observation (“it was easier to park”, “there were shorter queues at the food outlets”, “the cleaners told me…” etc), but we’ll see what the official figures say when they are released. There was a strong UK contingent, with only the grocers conspicuous by their absence (no, the multiple toy retailer of the year and a finalist in the online excellence category didn’t go to the world’s largest Toy Fair, but I am sure they have a note from their parents with a good reason…). There was also a strong US retail contingent, including the likes of Walmart and Target, so it will be interesting to see if that continues when the New York Toy Fair returns next year – personally, I have a sneaking suspicion that they will still come.

On the subject of New York Toy Fair, the dates have now been confirmed for ’26 and ’27 – February 14th-17th and February 20th-23rd respectively – allaying fears that the return to New York would see the show impinge on the dates of Nuremberg or London. These two shows peacefully co-exist and complement each other nicely, so it’s a relief to hear that the US won’t be throwing any curveballs into the mix.

As usual, a large percentage of the UK toy contingent present in Nuremberg congregated in the evening, put aside any commercial rivalries and enjoyed the delights of a variety of traditional German nightspots with an Irish flavour (it’s what we do). I am not sure if delegations from other countries do this, but they should – I find it’s an invaluable networking opportunity which adds an extra dimension to the trip.

Overall, the mood in the toy community continues to be one of cautious optimism for the year ahead. We’re collectively a little bit battered and bruised after last year, but ready to go again. Once again, there are challenges ahead, including elections in the UK and US, with the latter in particular set to have a seismic impact on the global geo-political landscape if the unthinkable actually happens (and it looks like it just might…), plus several global conflicts and the ongoing situation in the Red Sea, with the Houthi rebels seemingly undeterred by the recent actions of the US and UK air forces. All completely beyond our control of course, but capable of throwing some sizeable spanners in the works.

Let’s also not turn a blind eye to the rise of Chinese online purveyors of cr*p like Temu and Shein, which make Amazon look like saints. Toy Industries of Europe director general Catherine van Reeth told me in Nuremberg that they bought 20 toys off Temu to test how rigorously they were adhering to standards. Every single one failed even the most basic safety protocols; 18 had no address, one had an address of a bloke in Germany who had no connection to toys in any way and one actually stated that its address was “LaLa Land, California.” Yet EU safety regulations for toys are being tightened significantly, leaving legitimate toy companies facing more draconian – and costly – rules – while elements of the Chinese factory system are quite literally having a laugh. Very much a battle we need to come together to fight…

Despite the challenges, it was another successful and productive week. I had my traditional random encounter with a bloke on a train, who asked “are you John?” who said he reads us every day (a senior French kids’ TV executive) and I still can’t understand why German hotels put single duvets on double beds. I suspect there will be quite a few tired feet and numerous ‘out of office’ messages going on pretty early today – the follow up can begin next week.

Thank you to everyone who made time in their busy schedules to see the Toy World team in both London and Nuremberg. We know you’re there to see retailers, but we appreciate the opportunity to catch up and see all the great new lines we are going to be writing about in the coming months.

Have a great weekend, and for those who are still in Nuremberg, enjoy the last couple of days of the show.

It’s London, baby! … it’s the Friday Blog!

It’s the morning after the (incredible) three days before. My challenge – as it is at this time every year – is to get up at the crack of dawn, sink a mountain coffee to fire up the synapses and come up with something different to say about Toy Fair that you won’t read in the ‘official’ post-show releases and haven’t already seen across your LinkedIn feeds all week (although you can find a great review here).

If you were there, you will know that this week’s London Toy Fair was a great success. There was a buzz from beginning to end – even the last day, traditionally something of an anti-climax, was perhaps the busiest Thursday I can remember. And it was certainly not just because it was influencers’ day – as I made my way around my appointments, I saw numerous buying teams still fully engaged. Indeed, I gather that one very senior figure from ‘the largest’ UK & Ireland toy retailer told a few people that she could do with a 4th day of the show to get round everyone she wanted to see. I have been saying this for years (and I appreciate no-one is going to be swayed by me), but it’s interesting to hear that some major buyers are beginning to come to the same conclusion.

Every retailer you would expect to be at Olympia was present and correct (even one who apparently had said they weren’t coming – perhaps they saw positive posts on social media and changed their mind?), and several people said they were pleased to meet with potential new accounts, including a few major retailers not currently massive in toys, who appear to be exploring options to increase their toy selection.

The mood was surprisingly positive, given the news announced by Circana that the UK market was down by -5% last year, in line with both France and Germany (with the US market even further down at -8%). You might have thought that would put a dampener on things, but last year is firmly in the rear-view mirror, and if you can’t be optimistic and excited about the year ahead at this stage of the year, with all the new products about to launch and a blank canvas to work with, you may need to rethink your career choices.

Yes, of course there are concerns: new post-Brexit food importation rules that have already been delayed five times are due to come into force any day, which could see the cost of food rising again. Who knows what is going to happen with the Huthi rebels and how that will affect shipping costs as the year unfolds (up from $1500 to $5000-6000 in January, making it tricky to set prices for autumn winter). And the Tesco/The Entertainer partnership continues to drive some passionate conversations. It is clear there will be winners and losers – and in some cases, some very large black holes to fill. I suspect we could potentially see some significant changes in the product mix in Tesco when stock starts arriving in the next 3-4 weeks. Gary Grant phoned me after last week’s Blog to suggest I shouldn’t think of the arrangement as The Entertainer taking over Tesco toy departments, but instead that The Entertainer will be opening 800 new branches in Tesco stores. When you look at it from that perspective, some of what is about to happen becomes a lot clearer.

Against this backdrop of uncertainty, the enduring UK toy community positivity still shone through magnificently. January trading has apparently been good for many people, and there even seems to be a new sense of realism creeping in, with several people wondering if “flat is the new up”. I have used the word ‘community’ quite a lot leading up to Toy Fair, as I really do believe that is one of the unique aspects of the show. So, it was nice to see that acknowledged by none other than the legendary Hasbro founder, Alan Hassenfeld, who dropped onto our stand and had a lovely 30-minute conversation with Anita. How I would love to share some of the things he told her, but much of it must stay off the record – although I can confirm that he did say that London has long been a favourite show of his, due to the special spirit of community it exudes (he actually used a wonderful Jewish word, but unfortunately google hasn’t helped me to work out what it was).

Alan wasn’t the only high profile American at the show, with Basic Fun’s Jay Foreman also making an appearance, while there were also numerous senior management representatives from key European and International toy companies who made the trip. The show remains predominantly focused on the UK market, but the UK remains an important territory, and it’s nice to see many global toy companies acknowleding that.

From Toy World’s perspective, we had three team members experiencing their first-ever Toy Fair, and it was wonderful to hear them enthusing about who they had met and what they had seen at dinner every evening. We gave out every single magazine we took to the show (with the people working both entrances confirming to us that it was the magazine everyone wanted), saw a host of fantastic new product and spent invaluable time talking to our customers and readers. I would say that is three days incredibly well-spent. Massive congratulations to the BTHA team and all of the other support organisations that have once again delivered such a successful event.

And so, after a tremendous week, we have a couple of days to lie down in a darkened room to get our breath back before we head to Nuremberg to do it all again next week. Isaac Larian and Nick Mowbray’s lively LinkedIn exchanges have shown that the toy trade remains as passionate and fiercely competitive as ever (they’re literally metres away from each other in the same hall this year, so a walk down that corridor each morning could prove interesting). An extra travel curveball has been thrown into the mix with a German train strike to contend with, making a ‘Trains, Planes and Automobiles’ adventure likely for some poor travellers who elected to fly to Munich or Frankfurt rather than direct to Nuremberg. Good luck to you all, and if you are driving down the Autobahn and see someone from the toy trade thumbing a lift, I am sure you’ll pick them up. (UPDATE: since the publication of this blog, train drivers across Germany have ended the strike early, in time for the start of the working week, and indeed Spielwarenmesse. Hurrah!)

Have a wonderful, relaxing weekend and the Toy World team looks forward to seeing you in Nuremberg next week.

 

 

 

 

Countdown to London Toy Fair … it’s the Friday Blog!

The week before Toy Fair is always a slightly strange one. There are inevitably last-minute things that need sorting out and preparation to pull together ahead of scheduled meetings. Yet you still spend most of the week thinking “I just wish we were there now.” Thankfully, there’s not long to wait now…

We’ve already seen an increase in the number of press releases we’ve been receiving – and the deluge will turn into a flood any day now. The stage is set, exhibitors are getting excited, and hopefully retailers will be turning out in force. No snow is forecast, and there aren’t any train strikes planned, so that’s two big potential pitfalls avoided.

New products are the lifeblood of the toy market, they drive sales and generate excitement for consumers. We’ve already seen several early year launches getting off to a flying start (both Bandai’s Littlest Pet Shop and Flair’s Godzilla x Kong range have been cited by indies as selling well in the last few weeks), and with the next mainstream UK toy event – the Toymaster show – not taking place until the latter stages of May, the first half of the year will surely be far more successful if retailers can unearth a few gems at Olympia next week. That alone, in my humble opinion, makes a trip to the show absolutely essential for retailers large and small.

There have been a few significant changes on the buying side in recent weeks: it’s been common knowledge for some time that Charlie McNally will be leaving his role at Argos to take over toy buying for Europe at Aldi, based out in Dusseldorf, while Sarah Harding has left her role at Toys R Us UK to join The Entertainer. And what a time to be making that move…

No prizes for guessing the liveliest topic of debate in the toy community so far this year – The Entertainer taking over the running of Tesco’s toy department has unsurprisingly led to some interesting conversations. I caught up briefly with Geoff Sheffield in Hong Kong last week, as well as the Addo Play team, and it’s abundantly clear just how excited everyone within The Entertainer family is about this development.

Without giving away any major commercially sensitive information, I can certainly answer a few of the questions that have been raised most frequently by suppliers: for starters, anyone expecting The Entertainer to change its position on margin, now that it is controlling the Tesco toy aisles, is going to be disappointed. I am afraid suppliers are going to have to forget whatever trading terms they used to get from Tesco: that ship has sailed, and it won’t be coming back any time soon. The Entertainer secured the deal on the back of a successful trial – so it is not going to change what worked last year. And in any case, significant investment will be required to maximize the new partnership (store fittings, logistics capabilities, staffing etc), while Tesco will obviously be taking some form of ‘cut’…all the more reason for The Entertainer to maintain its traditional margins to cover these costs.

I can also confirm that if The Entertainer hasn’t been stocking a particular product range in its stores (i.e. Halloween, Harry Potter etc), that won’t change. Sure, those ranges may be found elsewhere in Tesco stores, but they won’t find their way into the toy aisles. And Sunday working for The Entertainer staff will remain off the table: schedules will be drawn up to allow the Tesco shelves to be restocked and merchandised late on Saturday evening and first thing on Monday, and there will be no staff from The Entertainer team on hand on the Sunday. All of this seems entirely logical and consistent, and to be fair, I didn’t expect anything else – anyone who knows Gary is aware that The Entertainer’s core values will never be compromised, whatever the circumstances.

Any influence from the existing Tesco toy buying team is already on the wane: appointments for Toy Fair have been cancelled (the day after they were made in some cases) and autumn winter orders that had been sent out were subsequently rescinded. The message is clear: as of now, toy suppliers are essentially dealing with The Entertainer for all Tesco toy-related conversations.

Not all suppliers are thrilled about that. The disparity between The Entertainer’s margin requirements and those of Tesco means that some lines that were big sellers in Tesco may no longer work under the new conditions, and even if certain lines stay in, the profitability will be significantly impacted. Without doubt, some suppliers are having to come to terms with that and evaluate how best to manage the situation. Other suppliers are seeing the upside: one pointed out that “the Tesco consumer will finally have a product range curated by people who are passionate about the product,” while others who struggled to establish a partnership (or even a conversation) with the Tesco toy buying team have nothing to lose and everything to gain.

Meanwhile, other retailers will be watching closely too: not just grocers, but major and independent specialists will be keeping a close eye on proceedings in case new opportunities present themselves as a result of The Entertainer / Tesco situation. Basically, there will be winners and losers – and everything is up for grabs.

The UK toy market may have been down last year according to Circana numbers (and don’t forget, that’s without factoring inflation in….), but we are starting all over again from scratch. New year, new challenges, new opportunities. It’s an election year, with an incumbent government a long way behind in the polls: expect tax giveaways out of sheer desperation if nothing else. Inflation is slowing (no, we aren’t paying less for anything …prices are just not rising quite as fast as they were – big difference) and maybe we won’t have a rain-soaked summer like last year.

Whatever happens, it all starts next week at Olympia. As Keith Elmer always used to say: “How can you be serious about toys and not be there?” That sentiment is as true as it ever was, and with the Toy Fair celebrating its 70th anniversary, we should all raise a glass or two next week to its continuing success.

Personally, I will be attending my 43rd Toy Fair, and I am still as excited about the show as I have ever been. It may have changed over the years, but it is still the one event which brings pretty much the entire UK toy community together in one place, and we should cherish that.

See you at Olympia. Toy World can be found on Stand B23, at the heart of the show.

Hong Kong takeaway… it’s the Friday (Hong Kong) Blog!

I have spent this week in Hong Kong, although I will be back in the UK by the time you read this Blog. I may or may not actually be awake (a week of atrocious sleep caused by jetlag takes its toll), but I will at least be on home soil.

When I flew out last Friday evening, I posted on LinkedIn that I would be heading here for the first time in four years, and I had numerous comments asking me to “tell it how it is,” which I intend to do. I got the distinct impression from some of the comments that US-based companies were rather hoping I would reinforce their perception that the trip is now surplus to requirement, while perhaps some people in the UK & Europe were hoping I could offer a more optimistic take.

I came with no pre-conceptions – all I can do is to reflect on what I have seen and heard over the past week, and then you can take from that whatever you choose to, and specifically what is relevant for your business. Of course, people who made the trip are maybe more likely to adopt more of a ‘glass half full’ perspective, while those who didn’t perhaps want to hear that they were right not to come. I will say that Hong Kong in January isn’t for everyone – maybe it never should have been.

That said, the majority I have spoken to this week seem perfectly happy that they came. Unsurprisingly, it is markedly different to pre-pandemic days – there are far fewer western faces around, both in TST and at the Hong Kong Toys & Games Fair. US visitors in particular have been thin on the ground (although interestingly, the ones that did come have been some of the most enthusiastic about their experience). There were far fewer showrooms open in TST, with many companies saying that although they doubled the number of appointments compared to last year, they would need to double again to get even close to 2019 levels.

But, interestingly, there are some positive interpretations of the footfall situation: many told me that meetings were easier to secure due to less competition, went on for longer (very few people rushed round showrooms in 10 minutes because they were running late for their next meeting) and the people who were here were serious, not just browsing. As a result, the quality of meetings has generally been felt to have been meaningful – if retailers or distributors committed to making the trip, they did so for the right reasons.

It could also be said that before Covid, certain retailers and toy companies came here largely out of FOMO, or – let’s not beat about the bush – to have a good time with their customers (and not to let their competitors have their customers all to themselves). Visitors sometimes included companies whose FOB range consisted of a dozen SKUs which were all also available domestically (or in some cases who didn’t even have any FOB offering at all). I’ll not go so far as to use the word ‘jolly’, but you get my drift. That doesn’t tend to happen anymore, taking the January Hong Kong trip back to its original roots as principally an FOB buying destination. To illustrate my point, Smyths had a team of 19 people here, but were apparently not making appointments with UK / European domestic suppliers – just Far Eastern vendors and factories.

Also here from UK retail were The Entertainer (now with added Tesco aisles to fill of course), Toytown, Home Bargains, Ken Black, The Works, TK Maxx, play-room and Menkind. Further afield, there were strong contingents from Australia, South America, Middle East, Europe (Greece, The Nordics, Germany, Turkey, Hungary, Netherlands were all mentioned) – and naturally, it’s an essential destination for the wider Asian market. If you want to see retailers or distributors from Asia, this is still the optimal place and time to do it.

So, who wasn’t here? US retailers and suppliers were conspicuous by their absence – and I don’t see that changing dramatically – LA is their new spiritual home. That said, I did find it both interesting and faintly amusing to hear that neither Walmart nor Target have confirmed autumn winter selections yet. But…but…people said they wouldn’t ever come here again or visit any other Q1 show because everything would have been finalized in November….and remember, this is after both LA and New York took place in September last year. Perhaps it just goes to show that selection timing is not cast in stone in perpetuity and can flex according to market conditions.

Apart from the US contingent, when you also factor in fewer clearance people, a miniscule licensing / media presence, no domestic suppliers just here because everyone else was and the absence of a large percentage of the international distributor crowd who have also become devout LA disciples, the trip has been stripped back to its core essence… and some have said they believe this has made it a more focused, better event for them than it even was pre-pandemic. And what’s more, no-one needs to get here on 1st January or stay for two weeks anymore – a briefer trip works perfectly well, is kinder on the budget and helps make January marginally less hectic.

I know this may not be what some of you wanted to hear (and if you all pile back, it will make it less focused again), but from what I have been told this week, I genuinely believe the trip still has its place in the grand scheme of things. It’s not for everyone, and neither should it be. Supplier or retailer, all I would say is if it works for your business model, don’t be put off by voices on social media writing it off because it isn’t necessary for them. My gut feel says it will never get back to the level it was pre-pandemic, but I wouldn’t mind betting that there will be a few more people here next year.

I’ll finish off with a few quick non-Hong Kong nuggets. Talking point of the week remains The Entertainer / Tesco situation – as I suspect it will for quite a while. More on some of the issues being raised in next week’s Blog. I know I haven’t said much about Christmas trading, but I am still waiting for greater clarification – although anecdotally, I have heard both directly and indirectly that a couple of the key players are admitting that the final week bounce didn’t materialize – indeed, I gather trading was actually down. If so, I can’t say as I am surprised – the fact stores had an extra trading day is, frankly, irrelevant. If a family had £100 to spend on presents, they didn’t have £120 because there was an extra day’s trading – that isn’t how it works when money is tight I’m afraid.

Finally, thanks for all your lovely comments about our January issue – if you missed it when we first shared it on Monday, the main issue and Nuremberg supplement will make wonderful weekend reading, especially if you want to stay in the warm. With the London Toy Fair celebrating its 70th anniversary, we really wanted to capture the sense of affection the UK toy community has for the event and the important role it plays in bringing everyone together. I hope the issue gets you in the mood for the show, as it won’t be long before we all convene at Olympia – I look forward to seeing you all there.

That’s Entertainer-ment … it’s the Friday Blog!

Happy New Year! I hope you all had a wonderful festive season, that your batteries are fully recharged and you’re ready and raring to go for Toy Fair Season. 2024 is the Chinese Year of the Dragon – apparently, one of the most powerful and luckiest animals in the Chinese Zodiac – so let’s hope some of that power and luck rubs off on the toy community.

2024 has certainly started with a bang, following the news that Tesco’s trial partnership with The Entertainer to run its toy departments will now be made permanent and extended to Tesco’s entire UK retail estate & key stores in the ROI. That’s a major coup for The Entertainer team, who will no doubt be fired up for the next stage of the partnership. And it’s massive news for the UK toy community as a whole…

Barely a week went by last year without someone asking me whether I had heard how the Entertainer / Tesco trial was going. Indeed, whenever I have spoken to Gary Grant over the past year, I have raised the question as to whether it was likely to be extended, only to be repeatedly told that he didn’t really know.

With the festive season behind us, I wondered if I would get a call from Gary with an update… which finally came yesterday lunchtime. And the news was exactly what Gary and his team had been hoping for all along: the Entertainer’s relationship with Tesco is to be expanded to its entire 759 store estate in the UK and key stores in the Republic of Ireland, while it will also be supplying a toy range to Tesco stores in Central Europe. Suppliers’ direct relationships with Tesco will end on 30th October, after the transition period is complete.

You can read the official story here and I wanted to give a little extra context for those processing what this will mean in practice. To say this is a massive development for The Entertainer would be the understatement of the year: when the trial was first announced and I asked Gary what impact it would have on the business if it was ultimately expanded to the whole Tesco store estate, he admitted it would be a complete game changer – “the biggest thing to ever happen to The Entertainer”.

Both the Republic of Ireland and Central Europe are completely new markets for The Entertainer – and to roll out The Entertainer branded toy departments to over 750 UK & ROI stores with incredibly high footfall levels is a massive opportunity. That rollout will start in March, and I understand it is likely to take around 6-7 months to convert all the stores: some have only 2-3 bays, but others will have up to 25 bays.

Understandably, Gary is beyond excited: “It’s good for both Tesco and The Entertainer. For the partnership to work, that has to be the case. I think it’s also good for the toy industry as a whole, and an amazing opportunity for our 1800 staff to grow their careers with the joint operation.”

Of course, not everyone will be as thrilled as Gary – some suppliers have long-term relationships with Tesco and may not operationally be as close to The Entertainer. Gary’s message to those people was unequivocal: “I say this to all current suppliers of Tesco’s toy department, and anyone else who wants to be part of it in future – come and talk to us. Geoff Sheffield is the man to talk to. He will be available to sit down with every supplier to discuss what the future looks like and to look at where there is common ground. Even if you don’t currently deal with us, the door is not closed.” I have a feeling that Geoff is going to be a very busy man indeed in the coming months.

I also think this development highlights the fact that unless a grocer (any grocer, to be fair) is prepared to put in place a team of specialist, dedicated toy buyers who stay in their roles for several years, learning the intricacies of the toy market and building strong relationships with suppliers, it will be difficult for them to reach anywhere near their full potential.

Elsewhere, the situation out in the Red Sea remains complex, volatile, unpredictable – and deeply concerning for freight forwarders and importers. Long story short, from what I can gauge talking to people in the logistics field, things are likely to get worse before they get better – and ‘better’ might even be as far as 3-6 months down the line. Rates for a 40ft container have almost doubled to over $7k this week alone, giving importers some tough decisions to make. Industry insiders say this situation could end up having an even greater impact on the global economy than the EverGiven fiasco, with 30% of the world’s container traffic traditionally going through the Red Sea. To make matters worse, containers are now getting stranded in places across the world where they shouldn’t be, and there are rumours that insurance companies will soon withdraw cover from ships that decide to risk using the Red Sea route, making the longer / costlier Cape Horn route unavoidable.

And there is nothing much anyone can do, although here’s one thought – should retailers scrap any fines for late arrival of shipments until things settle down? Some importers will currently be working out whether it is cheaper to pay the fine or swallow the short-term rate increases – a tough equation to balance in some cases. We could certainly do with a bit of that ‘Dragon luck’ in the Red Sea right now.

One thing’s for sure, there will be plenty to talk about for those of us making the trip to Hong Kong in the coming days. I head off later today, for my first visit to the region since January 2020 – just a few short weeks before the world changed. I hope to see as many of you as possible while I’m out there, so do feel free to drop me a message if you would like to meet up next week.

As retailers often contact me when one of their retail competitors does something daft on pricing, I am genuinely thinking of introducing a new column naming and shaming the perpetrators – maybe we could call it tw*t watch? This week it’s been the turn of Game to induce groans of frustration from toy retailers, having reduced all the brand-new Lego January launches by 20% on day one (insert face palm emoji here). Several specialist multiple retailers had apparently already broken the embargo by putting the new items on sale before Christmas, but a blanket 20% discount from day one raised the retail community’s blood pressure several more notches. Maybe I’m being naïve, but it just seems daft to me – and surely unnecessary? Anyway, welcome to tw*t watch… more to follow no doubt.

And finally, keep a look out for our January issue, which should be arriving any day now – if you get a knock at the door, it’s probably because it won’t fit through your letter box. I just hope your postman has been in the gym over Christmas preparing – we don’t want to give him a hernia. Happy reading when it does land on your desk – and the digital version will be online on Monday.

Festive frenzy … it’s the Christmas Blog!

Yep, we’re still here plugging away, ironing out the last little foibles on our January issue and making sure it will be a thing of beauty and wonder when it lands with an almighty thud on your doormat early in the New Year. Hopefully by the time you read this – my final Blog of 2023 – we’ll be dotting the final i’s and crossing the final t’s, before our designer Mark has the unenviable task of uploading the spectacularly huge file to our printer’s portal.

Of course, while it is the last working week of the year for many of us in the toy community (and some have already clocked off for the year), I appreciate that for retailers, it is a crucial week. And it’s followed by another massive week after the big day, when many consumers will hit the shops a) to see what is in the sales, b) because they have money or vouchers to spend or c) because they just need to get up from the sofa and out of the house. Whatever their motivation, retailers will be happy to see them (unless they’re bringing products back, of course…).

I’ve read a couple of LinkedIn posts from retailers this week saying that despite the lack of buzz and an absence of the kind of festive frenzy they were hoping for, they’re still trading up on last year – and in the end, the numbers are all that really matters.

On the retail front, we also unveiled the nominees for the Retailer of the Year Awards 2023 earlier this week. Congratulations to all the retailers who made the shortlist, and commiserations to those who just missed out. It is never easy to whittle down each category to only three potential winners. I look forward to finding out who has ultimately triumphed at the presentation during Toy Fair.

I also received a rather bizarre press release this week, highlighting a survey which suggested that over half of small business owners will be working on Christmas Day. According to the survey, many will spend time answering emails, while others will perform general admin tasks like paying wages or checking invoices. I am not sure I entirely believe this survey – I certainly hope it has just been completely made up to flog some kind of business service. Because if it is true, it’s a bit sad. Business owners – small, medium and large – work hard enough all year. Taking a few days off around Christmas is important. You’ve earned it. Whatever needs attention can wait a few days or should be done beforehand. I am not saying this from any particular religious standpoint – more from the perspective that we all need time off to recharge the batteries from time to time, and to spend time with our families.

Whoever was asked to fill in that survey, I can pretty much guarantee that it wasn’t anyone from the licensing community. I received a WhatsApp message from a licensee friend on Monday who had tried to email a licensing contact, only to receive an out of office reply saying that the person wouldn’t be back until 8th January. If his reply was on the latest episode of Sesame Street, his comment would have been brought to you by the letters F (repeated) and S. Although maybe small business owners should be ‘more licensing’? I doubt you will catch many of them working on Christmas Day… (insert your own punchline).

Meanwhile, back in the real world, who had ‘toy shipping disrupted by Huthi rebels’ on their 2023 Bingo card? It appears that the scamps have been targeting ships sailing through the Red Sea with drone attacks, presumably having watched the new series of Vigil and thinking ‘ooh, now there’s an idea we should try.’ In fairness, I shouldn’t be making light of this. Apart from the obvious danger to the ships and crew operating them, the decision by many shipping companies to avoid the Red Sea completely could have significant repercussions for the wider business community.

For toy importers, extended lead times by anything up to two weeks are looking likely in the short term. The diversion being proposed to avoid the Red Sea – a route around Cape Horn – not only takes longer, but will eat up more fuel, which means the shipping companies will surely be looking to offset their increased costs by putting up container prices, just like it was 2022 all over again. Thankfully, this is not a time of the year when many toy companies are bringing in large numbers of containers, but outdoor toy suppliers and companies with big Easter launches will no doubt be keeping a close eye on proceedings. It’s not just the UK either – the US is also likely to be affected if the situation isn’t brought under control swiftly.

On top of that, the Red Sea is apparently the main route for much of the UK’s oil supplies, prompting fears that the price of petrol, which has finally been coming down to a more sensible level, could well bounce back up again. Seriously – and I can’t stress this enough – NOT NOW HUTHI REBELS!

As this is my last Blog of 2023, I just wanted to wish all of our readers across the globe a joyful Christmas and a Happy – and above all Peaceful – New Year. Once our printer confirms that the January issue has been uploaded successfully, we’re out of here to enjoy the festivities – Anita and I have our first Christmas with our granddaughter to look forward to.

The Toy World team will return to the office on Tuesday 2nd January, and the email newsflash service will resume on the same day. Until then, you’re on your own. If any major stories break, I might put a line on LinkedIn, but that’s about it. Have a fantastic festive break and bring on 2024. It has to be an improvement on 2023…surely?!

Winding down for the holidays? Yeah, right… it’s the Friday Blog!

Someone sent me an email this week which opened with the phrase: “I hope you are winding down now ahead of the holidays.” As if – clearly that person isn’t overly familiar with what we do. For the uninitiated, there’s just the small matter of our (massive) January issue and first-ever standalone Nuremberg supplement to send to press before we break up for Christmas. If you want a comparison, right now at Alakat Towers it’s a bit like wandering around Toy Fair on the afternoon before opening day, when it resembles a building site. You look around and think “there is no way on earth this place is going to be ready to open tomorrow morning.” And yet when you turn up at 8.30am the next day, by some miracle, everything looks pristine and ready to go – as if the carnage of the previous day was just a bad dream. Hopefully we’ll be in the same position come next Thursday. Until then, it’s ‘all hands on deck’ and just a bit frantic.

Hopefully it’s the same for retailers. After a slow start to the festive season, I have seen an increasing number of encouraging social media posts over the past week, indicating that things are finally picking up out there. There will be those who say it’s too little, too late – and impossible to make up the ground lost in October, November and early December. However, at least sales are finally accelerating. I have said it before, but the next 10 days are going to be crucial – this weekend and next weekend can still be game changers.

One of the big challenges now will be how many retailers’ warehouses are still open to receive deliveries. I am even hearing reports of gaps opening up on some shelves, giving retailers the decision as to whether to replenish or just stick with what they have and hope that if consumers can’t find exactly what they want, they’ll buy something else instead.

It would be good to finish the year on a high, and hopefully with as clean stock levels as possible – we really want to head into 2024 without the excess inventory which blighted the first half of this year. It will be fascinating to see where it all lands as we catch up with the toy community when Toy Fair Season starts in January.

For the first time in four years, I will be heading back to Hong Kong in the first week of January. It will be the 50th anniversary of the Hong Kong Toys & Games Fair next year, and I am very much looking forward to joining the show to celebrate this milestone. The Fair was paused for a couple of years, and although it returned in person last year, it was largely a local Asian market focused event. So, next year will realistically be the first opportunity to assess how many people from the international toy community will return to Hong Kong in January. Speaking to a couple of companies based out there, diaries are beginning to fill up nicely. On which note, if you want to grab some time with me during the trip, feel free drop me a line.

After returning from Hong Kong, we have both the London and Nuremberg shows to look forward to. London will be celebrating a milestone of its own in 2024, as it hits its 70th anniversary. Then it will be on to Nuremberg to bring things to a close, as the traditional finale to Toy Fair Season – the New York Toy Fair – is on hiatus for next year (at least). From London and Nuremberg’s perspective, the fact there is no US show can only be a positive: in the past, some of the larger US companies held new launches back to be unveiled in New York. Now that the US event is on a temporary sabbatical, suppliers can reveal the hot new lines in London and Nuremberg instead.

Don’t forget to register to visit all the Toy Shows (Toy Fair here, and Nuremberg here) – and while you are about it, if you are planning on visiting the Licensing Expo in Las Vegas next May, you might want to sign up soon too. Amongst a raft of new initiatives announced this week, there will be an admission fee of $50 which will apply to many attendees for the first time, including licensees, licensing agents and service providers (but not retailers). There is a limited time discount enabling free registration for people who attended this year’s show – as long as you register by 31st January. After that, the admission charge will apply. It’s all part of the shows ‘Pathway to Reimagination’, which will see even bigger changes coming for Licensing Expo in 2025. More on that in due course.

Obviously the biggest – and saddest – news of the week came from Hasbro, which announced 1100 further job losses, on top of the 800 roles that were already lost earlier this year. It goes without saying that it must be hugely disappointing news for those people affected, especially hearing about it just before Christmas (presumably so it is off the books before Q1 earnings are announced). I am not going to dwell on this latest development or pontificate about what has led to the decision. I have been around the trade long enough to see the fortunes of the global toy giants ebb and flow: it wasn’t that long ago that Mattel was having a hard time and look at it now. Clearly Hasbro does need to make some changes, but I hear good things about the people at the helm, and I believe it will bounce back from adversity.

Finally, congratulations to Tony White and Valerie Leuzy on joining Wow! Stuff as general Sales manager and head of European sales respectively, all the best to retailers everywhere for this weekend’s trading and I leave you with this meme, which is for all the toy companies who post on LinkedIn how proud they are to be one of eight companies nominated for one of twenty awards and haven’t quite twigged what is going on yet…

Money’s too tight to mention … it’s the Friday Blog!

As discounting continues unabated at retail, I have come to the conclusion that the pricing bloodbath of the past few weeks has come from a very straightforward place: ultimately, I very much doubt it’s about ‘buying market share’ or driving sales of food & drink or other categories (the grocers are often accused of this, and whenever I speak to them about it, they almost laugh at the idea that this is their cunning plan). No, the simple truth is that retailers are sitting on way too much stock.

Did they overbuy? Maybe some did on certain lines. But I can’t countenance the notion that just about every retailer overbought on that many lines. Which leads me to the inescapable conclusion that retailers are just not selling as many toys as they had hoped – or anticipated. I don’t think it is because the current crop of toys is not compelling. I don’t think it’s because marketing activity hasn’t made consumers aware of what is out there. And it certainly can’t be the pricing, as the deals on offer have reached the ‘highly competitive’ stage.

Which basically leaves the uncomfortable truth that the cost-of-living crisis has bitten harder than we had all expected. The toy community has long fallen back on the adage that toys are recession proof, but this is certainly no ordinary set of economic circumstances. Unicef has revealed that the UK ranked 28th out of 39 developed countries when measured on its most recent poverty rate. An appalling 20.7% of kids were in poverty during 2019-21. And if anyone doesn’t believe that figure has got significantly worse over the past two years, I have a bridge to sell you.

Just think about that: one fifth of our target audience is in poverty – maybe that number is even up to a quarter now? That’s a big chunk of our potential customer base affected. I am not writing this to depress anyone – I think it’s valid to bear in mind that much of what is happening right now is largely outside of our control, and no-one’s fault. The finger of blame over price-cutting has been pointed in so many directions recently – and I can understand why retailers are so exasperated.

But maybe the real blame lies with a government that is more obsessed with dinghies than sorting out the very real financial mess that it has got us into. Rather than putting vast sums of money in the hands of a few (donors), spreading it around the general population would surely benefit all businesses infinitely better. They’ve had 13 years – hopefully they won’t make it to 14 and beyond, and we can work our toy magic on consumers who aren’t watching every penny in 2024…?

A quick warning to be wary of scammers – they do have a habit of creeping out of the woodwork at this time of year. One toy supplier flagged up that he had received a request for immediate delivery of stock purporting to be from Austins department store – which turned out to be entirely fraudulent when delved into. That’s the kind of devious behaviour that can sometimes catch companies out – using the name of a reputable retailer to catch people off guard who are a bit busy or so delighted to get an order they don’t look too closely at the detail.

Reassuringly, beyond the immediate short term, there are some really positive developments as we head into next year. The Toymaster May show is already sold out – earlier than ever. Ravensburger’s Lorcana is flying, and the third instalment of the game has just been confirmed for February – once again, the specialists will have a valuable two-week window before it lands in the majors (smart move – if it ain’t broke, don’t fix it). Mattel has signed a deal to produce a range of Wednesday toys, which will sit in its Monster High and Fisher Price Little People Collector ranges.

And last weekend’s Fence Club Christmas Party was not only a fabulous event which brought the toy community together for an evening of festive fun, it also raised an incredible £75,000 for the children’s charities which the club supports – a marvellous effort all round.

It has also been announced that Sainsbury’s will be moving to a new head office. After nearly two decades at its current location, the retailer will be moving to the sustainable JJ Mack Building in London’s Farringdon after the lease at its present head office on Chancery Lane expires in 2025. Hopefully its buying team will be so impressed with the new facility that it will want to spend a bit more time there…

Away from the UK, there has been plenty going on in the North American market too. It looks like Mastermind Toys has been saved from closure after a bid from Unity Acquisitions was accepted. The new operation will maintain 48 stores and close 18 – which should see a good portion of the 800 employees kept on. There was a story in the week which suggested that Toys R Us had been in talks with Mastermind about a takeover several months ago, but that the Canadian equivalent of the Competition & Mergers authority intervened on the grounds it would reduce meaningful competition in the market. Quite how they reconcile that nebulous possibility against the loss of 800 jobs would be interesting to evaluate.

Finally, as I first picked up during the New York Toy Fair, Toy Association president Steve Pasierb will be stepping down from his role when his contract ends in April. We wish Steve all the best with whatever comes next, and we wait with interest to see who his successor will be. Whoever it is will have some big decisions to take on the future of the US Toy Fair and what role the Toy Association can play in the whole ‘LA situation’.

That’s all for this week – I am keeping everything crossed for the next three weekends, the last one in particular, when many people will have just been paid. It really could go down to the wire this year.