No lentils required…it’s the Friday Blog!

Published on: 11th March 2016

Rumbles of discontent between landlords and their retail tenants are growing stronger by the day. This week alone, both BHS and Beales have filed CVAs: perhaps most worryingly, the BHS CVA suggests that the retailer will be unable to trade in its current form beyond 25 March, when its next rent payments are due. It has warned its landlords that they stand to lose over £500m if they don’t accept the plan; if they do agree to go along with it, some landlords will receive a mere 6.15p in the pound (which is still a lot better than the 0.005p in the pound they’ll get if BHS goes into liquidation though). Meanwhile Beales is said to be seeking a reduction of around 30% in the leases of 14 of its stores, with the Chairman admitting that “a minority of our stores lose money because leases agreed some years ago are no longer sustainable due to changes in the economy and local conditions.”

This seems to be the crux of the matter: leases signed when high street retail business was more profitable and under less threat from online traders are – in certain cases –  no longer viable. It certainly isn’t a black and white situation: there is something a little disconcerting about someone signing a contract, then backing out and threatening to go bust if the other party doesn’t agree to waive 90% of the money owed to it. Equally, it’s easy to see why retailers feel aggrieved at the leases, which are very possibly onerous (as a tenant myself, I have experienced the very best and worst of landlords in our brief five- year history).

Elsewhere we highlighted ongoing concerns over the exchange rate situation this week: if you missed that story, you can read it here. In fairness, the fact that freight costs are at an al-time low is helping to mitigate the problem in the short term, and it seems that companies are hoping the fall in sterling might be reversed after the Euro vote in the summer (providing it goes the right way, naturally…). However, if the pound does continue to fall sharply, two potential outcomes seem likely: one is that buyers will probably look to buy a greater percentage of lines on an FOB basis, and the other is that suppliers will almost certainly have no choice but to raise prices.

Also in the news, the Supreme Court ruled against Trunki in its bid to block rival Kiddee Case from being sold in the UK. Worlds Apart’s chairman Simon Birchenough wrote in with his thoughts on the subject, which we felt were well worth sharing – you can read the article here.


I was pleased to be invited to the Cartoon Network licensing presentation this week. If this sounds a strange thing to say, you would be surprised how many licensors – even some that we work really well with – have a ban on media attendance at these sort of events (while I suspect others just forget to add humble media representatives to the guest list). It’s not as if we don’t hear about what goes on, as we know the majority of the people who do attend: for example, we know which licensor served up what has been described as the worst lunch-time fare ever at a recent licensee presentation. Our contributors from Toy Barnhaus would definitely not have been impressed!

Cartoon Network not only came up trumps on that score, but had plenty of interesting new and revived properties to highlight as well: We Bare Bears is another strong addition to its portfolio of quirky original animation, while the two headline acts – Powerpuff Girls and Ben 10 – look to be very interesting propositions indeed. In the case of Powerpuff Girls, the toy category wasn’t a particular focus for the property when it was first launched (when apparel was the main priority), so I’m sure it will be a different ball game this time round. Numerous buyers have told me they feel there is a gap waiting to be filled in the girls’ market, so this will certainly be a contender. Ben 10 is a different matter altogether: here the question is how close it can go to matching its stellar performance between 2007 and 2014, when it was responsible for £4.5bn global sales. Admittedly it’s a different market now, but with Ben reverting to the 10-year-old incarnation which enjoyed the greatest success, the property has every chance of making a strong comeback next year. All this and not a lentil in sight – marvellous! At least everyone didn’t have to disappear round the corner to their favourite fast food joint as soon as the event finished….