Obituary: Bryan Stockton

The former chairman and CEO of Mattel Inc. has passed away at the age of 66.

Bryan Stockton

Bryan Stockton (image credit: www.justinkbrady.com)

Bryan’s long career at Mattel spanned 15 years, from 2000 to 2015. Over his time at the company, Bryan served as chief executive officer from 2012 to 2015 and chairman from 2013 to 2015. He joined Mattel in 2000 as executive vice president of Business Planning and Development and in 2003 was named executive vice president of International, rising to president of International in 2007.

Ynon Kreiz, chairman and CEO of Mattel said, “We are saddened by the news of Bryan’s sudden passing. The entire Mattel community joins me in sending our deepest condolences to his family. Bryan was a beloved leader at Mattel whose many contributions to the toy industry will live on for years to come.”

Bryan was a sought-after executive who served on several educational, not-for-profit and industry boards. He also held a variety of senior leadership roles at the Toy Industry Association, including two years as chairman.

After leaving Mattel, Bryan focused his attention on photography, developing his passion for the hobby into an award-winning career, including recognition from the distinguished Graphis Photography Annual, receiving a gold in the landscape category.

Ynon Kreiz offered deepest sympathy to Bryan’s wife, Maureen, the couple’s four children and two grandchildren, on behalf of Mattel.

Universal and AMC announce theatrical window agreement

The agreement follows a turbulent relationship between Universal and AMC Theatres, triggered by issues surrounding the coronavirus pandemic.

Universal AMC Theatres

Universal and AMC Theatres cinema chain have announced a multi-year agreement in which films released under the Universal Pictures and Focus Features banners will be shown in AMC Theatres across the United States with a 17-day theatrical window. Up until now the theatrical window has lasted 90 days, and the new agreement means films released by Universal Pictures and Focus Features can play in AMC Theatres for three weekends before hitting premium video on demand platforms (PVOD), including AMC Theatres On Demand. Discussions between the two parties around international distribution agreements are to follow.

“The theatrical experience continues to be the cornerstone of our business,” commented Universal Filmed Entertainment Group chairman, Donna Langley. “The partnership we’ve forged with AMC is driven by our collective desire to ensure a thriving future for the film distribution ecosystem and to meet consumer demand with flexibility and optionality.”

Peter Levinsohn, Universal vice chairman and chief distribution officer, added, “Universal’s commitment to innovation in how we deliver content to audiences is what our artists, partners and shareholders all expect of us, and we are excited about the opportunity this new structure presents to grow our business. We are grateful to AMC for their partnership and the leadership they have shown in working with us to reach this historic deal.”

The agreement follows disagreement between Universal and AMC Theatres. AMC announced in April that it was putting a ban on Universal Pictures titles after the studio released Trolls World Tour directly to PVOD platforms, instead of cinemas. The studio also broke the 90-day theatrical window to make other new titles such as The Invisible Man, The Hunt and Emma available on PVOD platforms after their theatrical releases were cut short by the coronavirus pandemic.

The relationship between Universal and AMC was put under furtehr strain when NBCUniversal film chief Jeff Shell announced that the studio was planning to continue releasing certain titles on PVOD platforms even after cinemas started to reopen,saying: “The results for Trolls World Tour have exceeded our expectations and demonstrated the viability of PVOD. As soon as theatres reopen, we expect to release movies on both formats.”

The new agreement is certainly a step forward in uniting both parties, although the full terms of the deal are confidential and are not being disclosed.

Amazon reports strong second-quarter results

Amazon’s second-quarter results have benefited from a surge of online orders amid the coronavirus pandemic. 

Amazon second-quarter results

Amazon has reported strong second-quarter results, helped by surging sales amid the coronavirus pandemic. The stock increased roughly 5.3% in hours.

According to analysts surveyed by Refinitiv, earnings are at $10.30 per share vs. $1.46 expected, and revenue breakdowns to $88.91b vs. $81.56b expected.

Amazon’s advertising business generated $4.22b in revenue, up 41% year over year, while subscription services, which includes revenue from Prime memberships, were up 29% year-over-year to $6.02b. Third-party sales grew 52% year-over-year during the quarter, outpacing growth in Amazon’s first-party sales, which increased 48% year-over-year.

Amazon, like many other retailers, has benefited from a surge of online orders during the pandemic whilst shops have been shuttered, which resulted in logistics bottlenecks and supply chain shortages. The company’s one and two day delivery services were hindered by delays, causing disruption in what is normally a quick and efficient shipping service.

Amazon CFO, Brian Olsavsky, noted that as the effects from the global pandemic continued, consumer demand shifted away from consumables and groceries, categories that are not deemed “super profitable” for the company, and moved instead toward a broader mix of products.

One and two day shipping have since recovered somewhat but are “probably considerably behind the going in rate before any of this happened,” Brian added. Prime subscribers have also notably been shopping more often and buying more products with each order.

The company was able to secure additional capacity in its fulfilment centres to help with the huge demand, employing capacity that the company didn’t expect to need to implement until 2021.

Moving forward, Amazon is working on making more room in its fulfilment centres as it prepares to head into the peak holiday shopping season. Additionally, the Prime Day shopping event, which typically occurs mid-July, will now take place in the fourth quarter, aligning with the early October guidance sent third-party sellers.

Earlier this month, Amazon further announced it would institute quantity limits for product shipments from third-party sellers that use its US warehouses, as part of an effort to guarantee enough capacity to store goods.

But as online orders continue to skyrocket, the company faces challenge around tensions between Amazon and warehouse workers nationwide, with employees claiming the company hasn’t done enough to protect them as they work through a pandemic.

In response, Amazon said it expects to spend more than $2b during the third quarter on additional coronavirus-related measures, including wage increases for employees. Last quarter, Amazon said it would spend all of its estimated $4b profit between April and June on similar efforts.

For the third quarter, Amazon said it expects net sales between $87b and $93b, representing year-over-year growth between 24% and 33%. The company anticipates operating income to be between $2b and $5b – taking into account additional coronavirus-related investments.

Alex Brands is revived under new ownership

Out There First aims to restart Alex Brands, which it has re-branded as Alex Global Products.

Alex Toys

It was announced this week that US based Alex Brands has been acquired and re-branded as Alex Global Products.

Out There First aims to restart the company, which shut down earlier this year and auctioned off its assets. Alex Global Products will offer brands including Scientific Explorer, Poof and Zoob, in addition to Alex Toys.

“We are very excited to be joining the Out There First family of companies,” commented managing director, Keith Gammon. “For decades, our iconic portfolio of brands has created a fun learning environment for children of all ages. There is a strong cultural fit between our two companies, and we are excited to leverage our world-class talent with the buying power and operational efficiencies of Out There First to drive strong revenue and profitable growth across all SBUs.”

Keith is a toy industry veteran who had been a top sales executive with Alex Toys and has worked for Mattel and Little Tikes, among others.

Winners of CHITAG’s Young Inventor Challenge: Spring Edition announced

The challenge offers the possibility of winning concepts being manufactured and sold on store shelves.

Young Inventor ChallengeThe Chicago Toy & Game Group, alongside sponsors Mattel, Magformers, Scholastic and the American Specialty Retailer Association (ASTRA), has announced the winners of the CHITAG Young Inventor Challenge: Spring Edition.

Launched in May in response to Covid-19, this special edition of CHITAG’s annual autumn Young Inventors Challenge gave kids the opportunity to develop their own original toy and game ideas, and pitch them to toy and game industry heavyweights. The challenge offers the possibility of their concept being manufactured and sold on store shelves. A highlight reel of entrants can be viewed at the end of this story.

Entrants were given access to CHITAG’s Young Inventor Design Guide, which provides step-by-step instructions on how to develop an idea into a marketable concept. Kids aged 6-18 then submitted videos pitching their original toys and games. Professional inventors gave constructive feedback and inventor relations executives from Mattel and Magformers chose both a senior and junior winner. Each winner will receive a $250 prize package of the latest toys and games.

Mattel’s Picks

  • Senior Winner: Color Code by Andrew Hebdon, a 5th grader from Forest, VA
  • Junior Winner: Cooking Collision by Analise Potsander, a 3rd grader from Goshen, IN

Magformers’ Picks

  • Senior Winner: PuzzleBots by Weston Aram, a 7th grader from LaGrange, IL
  • Junior Winner: Slap Happy by Emery Alderson, a 3rd grader from Horsham, PA

“We are always amazed at the ingenuity and creativity of the kids who enter the YIC,” said Leila Nosrati, the director of the Young Inventor Challenge. “This year’s spring challenge winners went all out creating detailed prototypes that rival some of the ones that I’ve seen in the professional toy and game industry.”

Past winners of the Young Inventor Challenge have gone on to strike deals with major toy and game companies including Goliath Games and PlayMonster, seeing their inventions licensed, manufactured and sold in stores across the country including Target.

The Young Inventor Challenge is currently accepting entries for the autumn competition, which has a deadline of October 31st. For more information click here. The Chicago Toy and Game Group is also looking for sponsors for the upcoming Young Inventor Challenge. For more information, contact mcouzin@chitag.com.

HKTDC launches advanced online virtual exhibition

Organised by the HKTDC, Summer Sourcing Weeks | Go Online opened on 27th July and will run until 7th August.

HKTDC

In view of the current Covid-19 pandemic, the Hong Kong Trade Development Council (HKTDC) has acted swiftly to change its strategy, migrating the nine physical exhibitions originally scheduled to be held by the end of July onto an online platform. In addition, an artificial intelligence (AI)-enabled business matching service is being introduced to help suppliers and buyers close more deals.

Organised by the HKTDC, Summer Sourcing Weeks | Go Online opened yesterday (27th July) and runs until 7th August. This 9-in-1 virtual trade exhibition has attracted more than 1,300 exhibitors, featuring lighting, electronics, information and communications technology (ICT), medical and healthcare, houseware, fashion, home textiles and furnishings, gifts, printing and packaging products. This brand-new online exhibition platform will help global buyers to replenish supplies and assist small and medium-sized enterprises (SMEs) in exploring new business opportunities during a difficult time.

Benjamin Chau, HKTDC deputy executive director, said: “Although the Covid-19 pandemic is presenting huge challenges for businesses globally, it also offers the prospect of online business opportunities for enterprises. The HKTDC has initiated various online promotions, including the Spring Virtual Expo in April and the Summer Virtual Expo in late June and July, to assist SMEs and international buyers overcome the challenges during this difficult period. Now, to further boost business connections between global exhibitors and buyers, we are launching Summer Sourcing Weeks | Go Online, an advanced online virtual exhibition that runs for 12 days starting from today and features the AI-enabled Click2Match business matching platform to help SMEs forge more connections and opportunities.”

He added that Summer Sourcing Weeks | Go Online is one of the HKTDC initiatives helping to expand the e-commerce capabilities of Hong Kong businesses.

Speaking at a virtual press conference to launch the event, Benjamin responded to a question about the future of physical trade shows by saying: “Physical trade shows are highly effective and efficient – there is no better way of connecting buyers and suppliers and enabling them to conclude deals. However, as nobody knows whether this pandemic situation might flare up again, it makes sense for us to adopt this new ‘hybrid’ online / offline model for events over the coming months. We believe it is in everyone’s best interest if we plan to conduct virtual events alongside trade shows while the situation remains uncertain.”

Walmart to close on Thanksgiving this year

The Thanksgiving closure will be the first time Walmart has been shut for the holiday in 30 years.

WalmartWalmart made the announcement this week, saying it wants to give a break to essential staff who have been working during the pandemic.

“We know this has been a trying year, and our associates have stepped up. We hope they will enjoy a special Thanksgiving Day at home with their loved ones,” stated John Furner, president and CEO of Walmart US.

The retailer added that it would release information about its store hours for the Friday after Thanksgiving, otherwise known as Black Friday, at a later date.

In recent years, retailers have timed their Black Friday deals to span a longer period and the day itself has become less significant. The deals in physical stores now have an increased amount of online competition, especially on Cyber Monday.

It remains to be seen how many other US retailers will follow suit. For years, Walmart led the way in opening earlier and earlier on Black Friday, with some stores even opening at midnight. Other stores, including Walmart, have opened on Thanksgiving Day itself.

“While Walmart has taken a very proactive approach, other retailers and shopping centre operators will probably wait to see how the virus and resulting government actions will continue to impact in-store traffic before making final decisions,” said Brian Field, senior director at ShopperTrak, which monitors consumer foot traffic in stores.

Mattel posts global second quarter sales decline but beats estimates

Barbie sales grew by 7%, while games also performed strongly.

Mattel results

Sales of the flagship Barbie brand rose by 7%

Mattel’s share price increased by more than 4% on Thursday, despite the fact that the company posted quarterly sales figures which fell across the board. Nevertheless, results were better than had been anticipated: the company reported a loss of 26 cents per share on revenues of $732m, while analysts had expected a loss of 34 cents per share on revenues of $679 m. During the quarter, the company’s gross margin improved on a year-on-year basis to 43.8%.

Overall, the company’s net toy sales declined 15% during the second quarter, although sales of the flagship Barbie brand rose by 7%. However, this was not enough to propel Mattel’s doll segment into growth – sales in the category dropped by 5% compared with last year. Other categories saw steeper declines: infant, toddler and pre-school fell by 21%, while vehicles fell 26% and action figures, building sets and games fell 12%.

Ynon Kreiz, chairman and CEO of Mattel, commented: “While revenues were down, they exceeded our expectations, particularly in North America, Barbie, and games, where we saw sales increases. E-commerce continued to grow strongly in all regions. We entered the second quarter with extensive retail closures and distribution challenges and had to absorb a full quarter of Covid-19 impact, but we demonstrated our execution capabilities and the resilience of our brands. Based on the momentum we are seeing, the positive POS trends and low retail inventories exiting the quarter, we are planning for strong demand for our products in expectation of an improved revenue performance in the second half compared to the first half, including the all-important holiday season.”

Ricky Zoom prepares for Australian debut

The animated pre-school series arrived on Nick Jr. Australia this month before making its way onto Channel 9 later in the year.

Full RZ sunset imageEntertainment One (eOne) has announced new broadcast deals for its all-bike CGI-animated pre-school series, Ricky Zoom, that will see it appear on TV screens across Australia for the first time.

The 52×11 min episodes from series 1 of Ricky Zoom are set to launch on Nickelodeon’s pre-school channel, Nick Jr., in Australia from Monday, (20th July), with new episodes airing weekdays at 10am. From November 2020, Ricky Zoom will also begin airing on Australia’s Channel 9 to further accelerate exposure in the region.

eOne’s Monica Candiani, EVP Content Sales, Family Brands, said: “We’re proud to be bringing Ricky Zoom to audiences in Australia by extending our partnership with Nickelodeon and welcoming Channel 9 as our terrestrial partner in the region. Ricky Zoom is an action comedy adventure series with real heart and these latest deals are testament to the strong appeal of the show.”

Since it debuted on screens in late 2019, the show has achieved impressive ratings in multiple markets. Nick  Jr. is already home to the show in both the US and UK, whilst Australia’s Channel 9 joins a growing list of broadcast partners bringing the show to a global audience. These include CCTV (China), Channel 5 Milkshake! (UK), Clan TV (Spain), Discovery Kids (Latin America), Thai PBS (Thailand), Gulli (France), Karusel (Russia), Minika Cocuk (Turkey), NRK (Norway), RAI (Italy), Spacetoon (MENA), Super RTL (Germany), SVT (Sweden), Treehouse (Canada) and Youku (China).

Hong Kong tightens lockdown measures once again

A resurgence of cases in Hong Kong has led to the reintroduction of tighter restrictions.

Hong Kong coronavirus

From mid-June to early July, no locally-transmitted cases of Covid-19 were recorded in Hong Kong, leading to a relaxation of lockdown measures in the city. Unfortunately, it was not to last: a spike in local cases over the past two weeks, including two fatalities earlier this week, has led the authorities to reintroduce the tighter social-distancing measures that were previously in force. Officials have said that the city is now battling a third wave of infections, and the government has reacted swiftly in an attempt to combat the spread of the virus.

The government has ordered 12 types of business to close, including gyms, nightclubs, karaoke bars and cinemas. Restaurants have been told to close at 6pm until 5am the next day: however, they can still offer evening takeaways and serve breakfast and lunch. Group gatherings are now limited to four people, down from 50. Hong Kong Disneyland, which reopened on 18th June, has been closed again, while the school year was ended a week early.

Hong Kongers have willingly adopted face masks to deal with the pandemic: however, the authorities have now made wearing face coverings on public transport mandatory for the first time. Those who refuse to wear a mask face a HK$5,000 fine.

There has also been an immediate impact on the business community: the massive Hong Kong Book Fair, which typically welcomes around 9,000 exhibitors and nearly 1m visitors, was cancelled just two days before the event was due to open its doors earlier this week.

A ban on international travellers and a compulsory quarantine for arrivals still has two months to run: there are now renewed concerns that these measures could be extended beyond the end of September, placing the traditional October buying trip in jeopardy, and even placing a question mark over the important January buying trip.

One local source told Toy World: “Anybody making predictions in a confident manner at the moment is clearly either ill-informed, dim or has a pecuniary interest in so doing.”