The toy retail channel has always been volatile, with surges of demand at short notice very much the order of things. True story; one major outdoor toy supplier told me that he received his first request for markdown money from a retailer two weeks ago – in the middle of June for goodness sake! I wonder how that buyer will feel if he has to phone up to ask if there is additional stock available over the coming weeks, which he almost certainly will if this wonderful hot spell continues. The truth is that while nerves of steel are sometimes required in the toy industry, more experienced buyers are perhaps better positioned to anticipate – and ride out – the ups and downs than their less experienced counterparts, who may panic at the level of stock being held (or equally likely, find it difficult to push back on a finance director panicking at the level of stock being held). More than one supplier has suggested to me in recent months that the success of retailers like Smyths and The Entertainer is very much a reflection of the quality, longevity and stability of their buying and management teams.
Another toy chain that benefits from vast toy trade experience and knowledge is Toytown; Alan Simpson tells me that the retailer has just opened its third new outlet this year in the former TRU branch in Glasgow. With new stores in Lisburn and Newport already open, and two further stores to follow in Dundee and Wakefield in the second half of the year, Toytown is another toy specialist which is clearly on the up. Indeed, four new locations have already been lined up for 2019; Alan tells me that he is being offered more new store opportunities than ever before, allowing him to pick the best options, both in terms of location and the suitability of the outlet itself.
Now that the Argos buying team structure has finally been settled, it will hopefully bring clarity and stability to the UK’s largest toy retailer; with Chris Watters moving across to the Argos electrical team, the remaining positions are all now confirmed. Suppliers will no doubt be relieved that the team is now firmly in place and planning can start in earnest for 2019.
Of course, not every retailer is prospering; John Lewis has announced that its first half profits will be “close to zero” and is even considering closing its legendary employee pension scheme. With Debenhams experiencing difficulties and House of Fraser in all kinds of trouble, the department store sector is clearly going through a particularly tough time.
While the TRU saga is very much done and dusted as far as the UK is concerned, it continues to rumble on in the international markets. A tweet from Isaac Larian earlier this week revealed that the general manager of TRU Iberia is apparently close to finalising a management takeover, which would potentially save TRU in France, Spain and Portugal. However, as we know from other TRU subsidiaries, it isn’t over until it’s over. Many thought the Australian TRU operation would be salvaged, but liquidation now looks inevitable. Indeed, last week saw the frankly scandalous revelation that, post-administration, in order to spend gift cards, consumers have to spend an equivalent amount of their own cash to redeem the card. Basically, any consumer unlucky enough to find themselves in possession of a legitimate, paid-for $100 gift card has to spend an additional $100 in-store or the card won’t be accepted.
Disgraceful as this ludicrous policy is, I’m amazed that the TRU IP owners in the US are allowing it to happen – it’s just another example of the TRU name being dragged through the mud and losing value in the eyes of consumers, not to mention potential suitors interested in acquiring the name.
We received quite a lot of feedback to the Alibaba story we ran online earlier this week, which featured extracts taken from an interview with Forbes magazine. In the original article, Alibaba denied that its new London office and 60 staff is a precursor to establishing the website as a viable competitor to Amazon in Europe. Rather, the move is being positioned as a means to help European companies access the Chinese market via the Alibaba site, and also to establish its proprietary payment method Alipay within Europe to help travelling Chinese tourists (even if it does sound like something my old pal Ali Mafi would have set up). The main question I have been asked is whether I believe this…on reflection, I think it’s fair to say that I remain mildly sceptical. In the article, the Alibaba spokesperson pokes fun at the small scale of the UK market compared to its vast Chinese base, and while that is undeniable, I can’t help thinking that Alibaba has gone to an awful lot of trouble just to save a few tourists having to change up a bit of currency. We shall see…
Finally, congratulations to Hasbro’s Foye Pascoe on taking over as chair of the BTHA – outgoing chair Jon Diver passed on the baton at this week’s BTHA AGM & Industry Day. The event also saw Arena Azure’s Jeff Taylor honoured with a Toy Trust Outstanding Contribution award for his invaluable work securing airtime for the annual media auction. Graham Canning will be taking over as chair of the Toy Trust from Foye, and we wish everyone all the best in their new roles.
Enjoy the weekend and roll on Tuesday, when we’ll see if the England football team can improve on its dreadful recent record in knockout competitions. What a lift it would bring if football really is “coming home”…