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Keeping it real… it’s the Friday Blog!

Published on: 16th September 2016

As an industry observer, I always aim to err on the side of positivity, while at the same time trying my best to offer an honest and authentic view of what’s going on in the toy and licensing arena – what the kids might call ‘keeping it real.’

There are undoubtedly plenty of reasons to be cheerful at the moment: Character Options and Hornby have both issued upbeat financial statements this week, with trading at both companies in line with expectations (albeit there is admittedly a slight disparity between the respective expectations of the two companies).

The Entertainer will be announcing its yearly results next week, and if I was forced to take a wild guess, I’d suggest they are likely to be pretty encouraging too.

Indeed, while there may be a general feeling that retail isn’t an easy game to be in, Toys R Us’ latest set of US results were pretty decent, while Asda even managed to pay a not-insubstantial £450m dividend to its parent company Wal -Mart (while a further £500m was paid from another Wal-Mart owned company in the UK to a Dutch subsidiary owned by…you guessed it, Wal-Mart!), so it can’t be all bad. “A capital reduction to simplify group structure” was how Wal-Mart described the payments, in case that defence ever comes in handy to anyone reading this.

In other UK retail news, Lego has announced that it will be opening its new London flagship store in Leicester Square on 17th November. The new outlet will be the biggest Lego store in the world, covering 914 square metres, ranged over two floors. There’s no denying that Lego is on fire: everything it touches at the moment turns to gold, and it is likely that the new store will follow the brand’s relentlessly upward trajectory. Nearby Hamleys may have fended off stiff competition from interlopers in the past couple of years, but it is about to come up against the Lego juggernaut. What happens in the coming months will give an indication not only to Lego’s power as a stand-alone retail brand, but also to C.banner’s commitment to maintaining its position as London’s pre-eminent toy retailer.

However, in the interest of keeping it real, it is fair to say that some retailers are finding the current climate a little trickier: John Lewis’ latest results showed a whopping 14.7% drop in profits, with the retailer warning that it was in the process of “taking steps to adapt the Partnership for the future.” It will be interesting to see precisely what those steps consist of, and whether they directly impact the toy department. I also hear a rumour that recent NPD presentations have struck a note of caution, with trading in recent weeks rumoured to be somewhat below par. Hopefully it’s just a seasonal blip. I’m not sure that the weather has helped; one retailer tweeted this week that he found it strange selling advent calendars and sand pits in equal volume on the same day, which just about sums it up.

The Licensing Awards took place this week, with toy-related wins for retailers Tesco and Argos, the Paw Patrol and Shopkins brands and several toy companies, including Spin Master and Rubies. The ceremony culminated with the presentation of a Lifetime Achievement award to Start Licensing’s Ian Downes, which was a hugely popular decision and richly-deserved. The whole event was, as ever, a very well-attended and enjoyable party (note the use of a polite term rather than something which traditionally happens in a brewery), albeit it felt like we were in a blast furnace rather than a hotel (nothing the organisers could do about that) and the awards presentation went on a bit (perhaps there is something the organisers could do about that…). I doubt I’ll be massively popular for saying that, but in fairness, if there had been a show of hands in the room, my guess is that 90% of people there would have agreed with me that a few less individual awards would have helped proceedings, although I appreciate that it’s a challenge to balance commercial considerations with the on-the-night experience.

Finally, I did find the satirical website News Thump’s take on the ongoing Tesco financial saga amusing; they posited the theory that the directors had been charged with fraud after putting £263m of Tesco Finest goods through the self-service tills as carrots. Sounds entirely plausible to me…

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