As any fan of the superhero movie genre will attest, there are heroes, villains….and some characters who have a foot firmly placed in both camps. I think Amazon very much falls into that latter category this week.
First the good news; while not officially corroborated, tangible evidence is beginning to emerge which suggests that Amazon may finally be taking greater responsibility for monitoring the safety and compliance of third-party sellers on its site. I was first alerted by a UK toy supplier who had suddenly been “inundated” with requests from Amazon third- party retailers for compliance documents. After a bit of digging, I found that he was not alone. Nor was the barrage of requests limited to the UK; factories in China and suppliers as far away as Australia have also confirmed that extra checks are taking place.
Of course, Amazon is unlikely to come out publicly and admit that its procedures are being made more rigorous for the simple reason that it has never admitted that it had a problem in the first place. So we can only surmise what may be taking place, but based on information from numerous sources, there finally seems to be some movement in the right direction.
Sadly, Amazon’s ‘hero’ status lasted literally hours, until it was revealed that Amazon UK’s services arm had paid a desultory £1m corporation tax in the UK last year. Given that its profits were £75m and its turnover exceeded £2.3b, Amazon must surely be up for ‘Creative Accounting of the Year’ award. Of course, there is no suggestion whatsoever that any impropriety has taken place; but I will place HMRC firmly in Villain Camp, for failing to close some obviously gaping loopholes in the tax system.
Sainsbury’s joined Amazon in Villain Camp this week, after changing its payment terms from 75 to 90 days at very short notice. The new terms align Sainsbury’s with Argos, so it was no great surprise, but the timing – slap bang in the middle of the main shipment season – is unlikely to have been an accident, nor will it have particularly endeared them to suppliers.
Those retailers will be delighted to know that they have some pretty rich and powerful company in Villain Camp. I’m throwing in President Trump, simply for wanting to double China tariffs after Beijing responded to his initial tariff threat by introducing retaliatory tariffs of their own. Apparently the US Treasury Secretary had to drum up the support of CEOs of big US companies to persuade Trump that this would be a stupid move. At least he backed down (for now), but I dread to think what will happen if he is re-elected next year.
Of course, our own government are long-term residents of Villain Camp – this week the pound actually rallied after a major government bill was defeated and it fired 21 of its own MPs. Currency resurgence under such circumstances is surely unprecedented, yet this is where we are. Should the government succeed in pushing through a No-Deal Brexit (by fair means or foul), it was revealed this week that vehicles would be likely to face a two-day delay in Dover, which could lead to a backlog of around 8,000 vehicles clogging up the Kent countryside. Most toy stock of Chinese origin should be in the country by then, but many global toy companies use European distribution hubs, so UK retailers could still be affected.
There is another possible consequence of chaos in Dover; if a company is holding stock in Europe, and it can secure better pricing and easier deliveries from the mainland, it may think twice about replenishing stock in the UK. Some hot lines may well stay sold out this year if retailers don’t commit early – however, with the pound languishing below 1.20, will that affect the number of ‘open to buys’ in Q4? Sterling’s volatility is also making some suppliers reluctant to quote prices for Spring Summer, lest they be caught out by a sudden swing. So I’m throwing all those currency speculators and hedge fund managers betting against the pound into Villain Camp too (it’s getting pretty crowded in there already).
Digressing for a moment, the fact that retailers can’t postpone Christmas orders too much longer may well have worked in Autumn Fair’s favour this week. Major toy buyers were unsurprisingly conspicuous by their absence, but I saw a few independent toy retailers stocking up, with the clearance hall a popular destination. One retailer admitted he would be talking in a Mancunian accent for the rest of the week after he spent so much time in there. Apparently there was a lot of Star Wars merchandise on offer at very attractive prices, and even some Lego Movie 2 stock, which by all accounts is quite a rarity. Overall, the show felt a little subdued; the aisles were not deserted by any means and some exhibitors told of opening new accounts, but the fact the coach driver told me they were only using two car parks this year tells its own story.
A quick mention for a breaking piece of news: the owner of Jazwares – New York-based insurance company Alleghany – has reportedly made a bid to acquire Jakks Pacific. More news on this bold move as it develops.
Finally, I wanted to pay tribute to a much-loved, inspirational member of the UK toy community who passed away last week. Alpha Animation’s Mark Slater-Hyndman had been unwell for some time, but he bore his illness with incredible fortitude and courage. I spoke to someone who met with Mark only a few short weeks ago; he was still working despite everything he was going through. The huge number of heartfelt comments that people posted on the story in my LinkedIn feed show just how deeply people felt his passing; I have rarely witnessed such an outpouring of emotion from the UK toy community. At only 54, he was taken far too soon – our thoughts are with his husband Tom and family. Mark’s memorial service will be held at St Andrew Church, Hove on Friday 20th September. Sadly I will be out of the country, but I am sure the Church will be full to bursting with people wanting to say a fond farewell to a beloved friend and colleague.