On a roll…it’s the Friday Blog!

Published on: 22nd March 2019

The Entertainer has dominated toy headlines again this week – it really is on a roll at the moment. Fresh from last week’s acquisition of Early Learning Centre, this week saw the release of the retailer’s 2018 results – and a very positive set of figures they were too. Total sales climbed by 21.7% to £197m, while profit increased by 31% to £15m. When you take into account the current retail climate, this is a mightily impressive performance. The Entertainer has certainly come a long way since it first opened in 1980; its turnover in year one was a mere £100,000.

I was privileged to be the only journalist invited to attend The Entertainer’s internal business update at which the results were first unveiled, and there were some fascinating statistics beyond the headlines. Sales increases came across the board; stores achieved a like-for-like growth of 17.3%, while sales via its website grew by 38% across the whole year and a massive 50% over the peak festive trading period. The deal with Matalan to curate its toy offering added £4.5m to the turnover, while international growth continued apace via 32 new store openings. The Entertainer is looking to open a further 27 stores in the international market this year, in territories including India, Malaysia and UAE. Its UK store opening target is slightly more modest – 12 new stores are planned over the next 12 months – which Gary Grant describes as “a prudent approach in the current climate. We need the uncertainty behind us.” That said, the Early Learning Centre deal will certainly boost The Entertainer’s UK presence; there is even talk of standalone Early Learning Centre stores returning to the High Street at some stage. In addition to new store openings, The Entertainer is also being given opportunities to relocate existing stores to better locations, as landlords acknowledge the positive impact its outlets can have on footfall. It’s great to see a specialist toy retailer thriving in a tough year for the High Street – long may it continue and let us hope that other toy retailers can also continue to buck the trend.

One toy brand which has continued its strong showing from 2018 is L.O.L. Surprise! (As a journalist, how annoying is that exclamation mark?). However, its stellar performance – along with that of the collectibles market as a whole – had started to cause a conundrum for some of the more environmentally-aware retailers. Clearly the huge numbers of dolls sold was generating a significant amount of packaging waste, and I started to receive emails from retailers last year, who admitted they were slightly uneasy about this. So it’s no surprise that this week’s announcement from Isaac Larian, confirming that MGA will be partnering with recycling specialist Terracycle on a global recycling scheme to address the excess packaging issue, has been warmly received. Hopefully now that MGA has taken the lead, it may encourage other toy companies to follow suit.

Another huge trend over the past year has been the addition of sequins to a wide range of toy products. This has come to the attention of the Administrative Cooperation Expert Group on Toy Safety within the EU Commission, which has issued guidelines that toy suppliers and retailers would do well to heed – you can read more about that here. Ty, which has been instrumental in popularising the sequin trend, has always been aware of the potential pitfalls. From the start, the company positioned its Flippables range and other sequin products as gift or fashion items rather than toys. However, some of the ‘tributes’ (ahem) that have subsequently jumped on the sequin bandwagon may not have fully considered the ramifications – that may change with this latest pronouncement.

The ongoing Debenhams saga shows no sign of either abating or reaching a resolution. Mike Ashley’s advances have been rebuffed on several occasions, with the latest subtle threat from the retailer – that it would consider putting itself into a pre-pack administration to avoid having to acquiesce to Mr Ashley’s demands – escalating tensions to a whole new level. The leak of this option also puts pressure on its lenders; if Debenhams can secure the £150m it is seeking from backers, a pre-pack administration would no longer be required. With a £50m quarterly rent payment due next Monday, Debenhams appears to be playing a game of brinkmanship which rivals our government’s Brexit strategy for bravado (or stupidity, depending on your perspective).

Disney has finally completed its acquisition of 20th Century Fox. I read a comment on LinkedIn which suggested the move had taken Disney “from a behemoth to a colossus.” It put me in mind of the latest series of Who Wants to be a Millionaire, and in particular the ‘fastest-finger-first’ opening round. If those descriptions came up as options, I would genuinely have no idea whether a behemoth or a colossus was bigger. Either way, while the deal will have a major effect on areas such as movies, broadcast and theme parks, I’m not sure it will have quite the same impact on the licensing business in the short-term. Other than The Simpsons, Fox has struggled with licensing in recent years; arguably, the acquisition just gives Disney an even greater number of middling brands to add to its already ‘full –to-bursting’ portfolio – just what licensees needed (not).

Finally, I’d like to congratulate Little Tikes on its 50th anniversary celebrations, and also the Playtime PR team on its fifth birthday this week. It’s nice to see both companies continuing to thrive and celebrating significant milestones – in Little Tikes’ case, literally, by turning its boardroom into a giant ball pit, with a giant slide set up to propel staff into the 67,000 balls below. I bet there aren’t too many industries where companies mark major anniversaries in such entertaining fashion….we’re already planning what to do to commemorate our 10th anniversary in a couple of years’ time. Watch this space!