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It’s a big news week, read all about it….it’s the Friday Blog!

Published on: 7th March 2014

Some weeks it isn’t easy to write the blog. Thursday afternoon rolls round and I stare at a blank computer screen, wondering what on earth I can conjure up to fill it. This is not one of those weeks. There have been more genuine news stories breaking in the past week than any other seven-day period I can remember.

It all started last Friday when, true to form, just after we had sent out the newsflash and Blog, news filtered through from the US that Mattel had acquired Mega Brands in a $460m deal. Having spent a few years in the industry, I’ve seen my fair share of similar deals, but this is certainly the biggest for some while. In hindsight, it wasn’t a huge surprise. The construction sector – one of the few super-categories in which Mattel hasn’t previously been represented – has been the most buoyant toy sector across the globe for the past few years, and has continued to show healthy growth despite the general economic malaise. The success of Construction Toys has had a significant impact on competing categories such as the Boys Action market, and it shows no sign of slowing up. Lego has grown to become the second highest turnover toy company in the world, and its profits are believed by some to have eclipsed those of Mattel. It was only a matter of time before Mattel decided to do something to address that situation. Having seen Hasbro struggle to establish its proprietary Kre-O construction brand, it’s likely that the Mattel board saw acquisition as a preferable route to market. Mattel and Mega had already collaborated on the Barbie construction range, which in hindsight could be seen as something of a test. The fact that it keeps the royalties in-house – which is also true of the Hit acquisition – could only have made the case for acquisition stronger. Ultimately, time will tell whether it was a good deal: Mattel has certainly had its fair share of disastrous acquisitions in the past, but I have a sneaking feeling that this will prove to be one of their better pieces of business. $460m doesn’t look terrifically extortionate, especially when you consider that Mega isn’t well-distributed in a number of territories in which Mattel is strong. I would be surprised if there was any short-term change in the day-to-day running of Mega: it’s the years to come which will show how serious a challenge Mattel can mount to Lego’s dominance of the sector.

As if that wasn’t enough, top-level personnel changes have come thick and fast throughout the week. First it was announced that Chris Spalding would be leaving his role as managing director of LeapFrog to become chief executive of the HTi Group. Next we learnt that Neil Bandtock has left his position as managing director of the Vivid Group. There is no news yet of where he might pop up next, although there has certainly been plenty of speculation. Vivid confirmed that they would not be replacing Neil, and that his previous duties would be shared amongst the existing management team. Finally it was revealed that Toy Fair ‘supremo’ Simon Pilling would be moving on at the end of April after five years in the role to start his own marketing and events business. The BTHA has started the search for his successor.

With all this to report, my observations on what is happening at TRU in the States and how everyone and his snowman missed a trick with ‘Frozen’ merchandise will have to wait until next week. At least I’m already building up a few potential stories, just in case I find myself staring at a blank screen next Thursday afternoon.

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