Since I wrote about the new TRU set-up in last week’s Blog, more details have emerged about the operation, which answer a few of the questions I posed. As I understand it, TRU is approaching suppliers with a list of the available in-store fixtures, from which they can choose their slot. There is no product selection per se; companies decide what products they put in their allotted space and what price they sell for. They also choose if and when to mark it down, and by how much. They can even price at one level in one store and another level in the second store, should they want to test the impact of different prices on the rate of sale.
Indeed, I get the over-riding feeling that these new stores are being positioned very much as soft launch / beta-testing facilities. Interestingly, the tech angle – the “sensors and specialists analysing customer interactions” which I mentioned last week – is thought by some to be largely a red herring; TRU’s partner b8ta raised its cash as a tech company, so there have been suggestions that these elements are mainly there to assuage those investors.
Some crucial details remain unknown, chiefly the cost for the space and who has signed up so far. The two may be inter-linked; if the costs are reasonable, there is little downside to signing on and at least giving it a go. The grapevine suggests that TRU are telling vendors that all the big players have signed on – but then they would say that, wouldn’t they? I have no doubt that they appreciate that consumers are less likely to be drawn to a store populated entirely by second-tier brands, so they understand the importance of getting the key companies on board. The question remains – will all the major players agree to trial the concept, or will any feel that past issues just can’t be over-looked?
Anyway, US suppliers probably have more pressing matters with which to concern themselves, after President Trump’s itchy twitter finger reignited the likelihood of new tariffs being added to toys coming from China. Whether the 1st September deadline is the landing date or the shipping date no-one quite knows, but it looks like the threat may be real. The definitive word on the subject comes from the Toy Association’s Steve Pasierb: “Facts, logic, detailed financial explanations, testimony, and first-hand stories from toy companies and retail employers here in the United States apparently still cannot prevail over the power of the tweet.” Quite.
Spin Master is the latest toy company to unveil a very positive set of results, with its European performance particularly impressive – growth of 42.8% in the current climate is nothing short of stellar. Notable Q2 successes included Bakugan, Dreamworks’ Dragons, Monster Jam and Paw Patrol setting the company up for a strong year. We can also exclusively reveal today that Mattel’s EMEA operation was the fastest-growing international segment of the business in Q2, comfortably outstripping the company’s global growth over the past three months. It’s encouraging to see the European market becoming a key driver for these multi-national corporations’ businesses – long may it continue.
A few people have been heading out to Hong Kong in recent weeks – it will be fascinating to see whether they feel the recent civil unrest has had any impact on business life in the city. We’ve all seen the astonishing scenes on TV, and now that protests are spreading to the airport, Causeway Bay and other places and districts the toy fraternity frequents, the potential for disruption appears to be growing ever greater. It is such a huge shame to see a city we all know and love affected like this – hopefully the situation won’t escalate further. If you are about to head there, maybe don’t pack too many black t-shirts this time round…
Elsewhere, the Giochi Preziosi takeover of Famosa – first revealed by Toy World at the end of May – has finally gone through, creating something of a Southern European powerhouse. It has been suggested that the combined company turnover could exceed 700m Euros, which would increase the operation’s clout considerably, not just in Italy and Spain, but throughout the wider European market and beyond.
A quick mention for Bandai’s John Carlaw and his wife Victoria, who will be undertaking a 100-mile cycle ride to raise money for Great Ormond Street Hospital this weekend – if you would like to support them and this great charity, you can sponsor them here.
The August issue of Toy World landed on desks earlier this week – in fact, it arrived a few days earlier than even we had anticipated! You can read the digital version of the issue online here: at a very healthy 100+ pages, it’s a great way to bring our eighth year of publishing Toy World to a close. There are some great product category features and opinion pieces, an extensive preview of Autumn Fair and THAT licensing survey. However you are connected to the licensing world – licensor, licensee or retailer – I believe the findings are well worth exploring. If you agree or disagree, or have any thoughts as to how all the different parties can work together to overcome some of the challenges highlighted, we’d love to hear from you. Part two, which will explore some of these solutions, will be heading your way in our eighth birthday issue next month – so there is still time to contribute to that. And if you’re heading to BLE in October, you can come and listen to me and a panel of very knowledgeable people discuss the subject in person. I’m hoping it will be a lively and informative debate – a bit like Toy World, but in the flesh.
Finally, in a week where the subject of knock-offs has created some rather heated exchanges on LinkedIn, Poundland has metaphorically asked someone to hold its beer and thrown itself headlong into the debate. The press release which announced the arrival of its new ‘brand compatible’ range of £1 toys is pretty unashamed, referring to the “steep” price of brands and brazenly naming the brands which the range ‘pays homage’ to (including Lego, Hot Wheels, My Little Pony and Nerf). I’m sure Poundland’s lawyers have been through everything with a fine tooth comb to ensure they haven’t crossed any boundaries, but morally, I’m a bit uneasy about the whole thing. The press release criticises the price of the branded items, without a hint of irony – in particular, the simple fact that without these iconic brands to ‘reference’, Poundland’s new range wouldn’t exist in the first place. Isaac Larian suggested in one of the aforementioned LinkedIn exchanges: “It is my opinion that retailers who buy and support blatant knockoffs are as much at fault as these toy companies.” Yet here we have a retailer going a step further, and proudly boasting about what it has done. Naughty.