Monday 1st June – Latest toy industry reaction to coronavirus outbreak

Published on: 1st June 2020

Today, news from Argos, B&M, Debenhams, Harrods, the BRC, Cineworld and a new national day for Spain.

Argos has launched a new TV ad to appeal to customers during lockdown. A variation of the company’s well-received Christmas ad, which featured a father and daughter drumming to Simple Minds, the new ad uses Daniel Bedingfield’s Gotta Get Thru This. The song is accompanied by a compilation of clips of the public drumming along to the song using household implements and looks to create a sense of togetherness during lockdown as well as evoking brand familiarity.

The Crecer Jugando Foundation, linked to the Spanish Association of Toy Manufacturers (AEFJ), has suggested to the Spanish government that April 26th be established as Día del Niño (Children’s Day). This is the day that the children were first able to go outside again after lockdown. The foundation believes that such a day would recognize the sacrifices made by children during the period of confinement. As it is likely that toys would be purchased as gifts on such a day, the foundation says it would also highlight the importance of toys and playing to children’s well-being. The proposal references the United Nations General Assembly, which has previously urged countries to establish their own Children’s Day, a measure already adopted in countries like Germany, Portugal, Poland, Brazil, Argentina, Mexico and Australia, among others.

B&M has revealed a revenue rise of 22.7% during the first eight weeks of its financial year, which mostly covers the lockdown period. The company has seen “exceptionally strong” demand, with customers’ average spend much higher than normal, although they have visited stores less frequently.

Sales in some key categories were reported to have been brought forward, due to both the lockdown and warm spring weather in the UK. Gardening and DIY ranges performed particularly well, accounting for 10.4% of the increase, and although shopping trips were motivated by essential purchases, other categories benefited as additional items were added to baskets.

CEO Simon Arora thanked customers for their patience and consideration in observing social distancing, and thanked staff for their hard work, dedication and resourcefulness: “B&M is doing its bit in terms of keeping our customers supplied with the things they need week-in, week-out during this period of enormous disruption to the normal operation of the business. I am extremely proud of the way our teams have responded to the challenges involved in meeting demand at the same time as doing the right things when it matters, such as providing £2m of discount to NHS workers during the crisis and a £1m food bank donation.”

Debenhams has announced the loss of 1,000 jobs across its head office and store estate, as well as the closure of 17 further stores. Redundancies will be made in the company’s merchandising, buying, design and other administrative functions at head office, and in cafes and other services that will not reopen under social distancing rules in stores. Although the company had already announced the closure of its toy department, the move marks a further shift in the overall business model for the retailer.

A spokesperson said: “In the context of a retail industry undergoing profound change, the management team is working on the future shape of the group, with a view to exiting administration as a going concern. With a leaner and more flexible operating model, Debenhams will have the ability to adapt to what are likely to be fundamental shifts in the future trading environment.”

Cineworld has said that it expects government restrictions related to cinemas will be lifted by July and expects to open all of its branches, subject to confirmation of the schedule for film releases. Physical distancing rules will be enforced, with strict levels of hygiene to ensure “a safe and enjoyable cinema experience for employees and customers”.

The organisation has secured new funding via a waiver on the company’s loan covenant and has agreed £89.7m of extra liquidity through an increase in its revolving credit facility. Credit committee approval has also been granted to apply for additional funds through the Coronavirus Large Business Interruption Loan Scheme in the UK. The company said that these measures mean that there is “sufficient headroom to support the group even in the unlikely event cinemas remain closed until the end of the year”, although it awaits confirmation of exactly what films studios will release, and when.

As well as reopening its flagship London store in June, Harrods has announced the opening of an outlet shop to sell surplus stock from the restricted spring season. The new outlet will be based in Westfield White City and has been designed to allow more space for customers to shop safely.

“In the new world in which we find ourselves, the economy needs businesses willing to look at its business model and current operations and think differently to enable growth, while protecting its customers and employees,” said MD Michael Ward in a statement. “Harrods Outlet allows us to enable better social distancing across a larger footprint.”

The British Retail Consortium is working with the government and local authorities to establish clear plans on managing public spaces once shops begin to reopen from June 15th. Customers are likely to face queues outside most shops as the lockdown eases, and trade groups have asked small business minister Paul Scully for advice on how best to manage the expected queues. The BRC has called on the public to be considerate of staff and fellow shoppers, to follow signs and instructions and to maintain social distancing. There is concern that shopping centres and narrow streets do not have the space for single-file lines, and retail bosses have called on the government to reduce social distancing from two metres to one metre, as in some European countries, so that queues will take up less room.

The government has committed £50m to help councils in England introduce safety measures, but has stressed that shop owners and businesses, along with the public, have a shared responsibility to follow the advice on social distancing. Local trade groups and councils are working on plans to widen pavements, re-route foot traffic and pedestrianise some shopping areas. Many retailers will be forced to designate staff to ‘police’ queues, to help avoid conflict with neighbouring premises. In central London, the New West End Company has advised retailers not to run sales in the first few weeks and stagger opening times. Ticketing technology company Accesso has seen a noticeable increase in inquiries about its virtual queueing software, which allows customers to register at a business and return when they are notified by text that it is their turn to enter.


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