Smyths 2017 UK results were released this week, and it will come as no surprise to anyone in the toy community that they were incredibly strong; the retailer posted sales of half a billion Euros in the UK for the first time, an increase of 11%, while pre-tax profits surged by 18%. Based on what I am hearing from suppliers, the 2018 results are likely to see a similar upward trajectory. The new Smyths toy catalogue is launched today, supported by a TV ad – prominently featuring Harry Potter products – which you can view here. As one experienced (American) toy person commented on my LinkedIn page: “Padraig Smyth and his team know products and their customers better than any retailer I have ever come across.” I suspect few would disagree with that assertion.
There have also been a couple of notable licensing deals announced this week; Hornby has played a blinder by signing a licence with Warner Bros covering multiple properties across its Hornby, Corgi and Scalextric brands, the highlight of which is arguably the Harry Potter tie-up – a Hornby Hogwarts Express will surely be massive, and just the kind of product the company needs right now. Tomy must also be delighted to have secured the master toy partnership for eOne’s new property Ricky Zoom. eOne has an enviable track record in the pre-school category with Peppa Pig and PJ Masks, so I’m looking forward to finding out more about Ricky Zoom at BLE.
Away from this sceptred isle, the footage of typhoon Mangkhut wreaking havoc in Hong Kong vividly illustrated just how terrifying these kind of weather events can be. The sight of the sea crashing through the front windows of the Intercontinental was particularly prescient; I am sure many of us have sat there at one time or another, admiring the breathtaking view across the harbour. One can only imagine the devastation the typhoon caused across the Philippines if it had such a seismic effect in a built-up city like Hong Kong. Hopefully everything will be cleared up by the time a large chunk of the global toy community rolls into town next month.
Speaking of huge messes that will take a long time to clear up brings me neatly to the US and our old friend Donald Trump. I was taken to task by one reader when I referred to him as ‘President Chump’ a few months back: I am fairly sure that people in the US toy community have been calling him far worse names this week, after the trade war with China escalated several notches further. Tariff increases were thrown from one side to the other In a bizarre, high stakes political version of the Chuckle Brothers: ‘To you – to me’. As things stand, finished toys still fall outside the set of products affected by the latest 10% tariff imposed by Trump, although the list does include raw materials, components, art & craft items, children’s furniture and other juvenile products. Further tariffs next week – which have been explicitly threatened – would almost certainly bring finished toys into the equation. If that happens, the timing could hardly be worse with the critical festive season almost upon us; it really would turn Trump into ‘The Grinch who Stole Christmas’ (although the word ‘Grinch’ could equally be replaced by something far more Anglo-Saxon – feel free to insert your own epithet).
I’m just glad that I don’t live in a country where the government of the day would knowingly risk crashing its economy, putting jobs at risk and making its people poorer on the basis of questionable ideological grounds or in an attempt to facilitate their rich friends and clients profiting from the maelstrom of economic chaos. Oh, hang on…
On the subject of Brexit, I was asked a question by a supplier this week: with less than six months to go before we (theoretically) leave the EU, what happens to CE marked stock which has a European address on it? Will it all have to be stickered with a UK address? Will there be a period of grace for it to be sold off (and if so, how long will that be)? I am sure there are thousands of similar anomalies and procedures which will have to be worked out…in six months! Heck, that is no time at all – I have business trips and holidays booked beyond that. It is at this point that you begin to wonder quite how prepared we are for the worst-case scenario (i.e. No Deal and WTO rules…surely to swiftly become known as WTF rules). We recently received a letter from HMRC, purportedly advising us what to do in case of No Deal – except that the extent of its advice was basically “Er, we don’t really know, have you asked your trade association what they suggest?” It’s a bit like when my kids were little and an awkward question was batted off with “Ask your mother”.
Another disadvantage of exiting the EU is that we potentially won’t benefit from its many good works in the fight against the murkier tactics of global corporations such as Amazon and Google. This week the EU regulator has opened an inquiry into Amazon’s use of data, specifically seeking to ascertain if it is using merchant data to gain an advantage in selling items against those merchants (I think we all know the answer to that question). Given the burgeoning power of these tech companies and the complexity of international law (and tax law), this is surely one area where co-operation is imperative to stop them exploiting loopholes? But hey, at least we’ll get our blue passports back, so let’s look on the bright side!
There’s just time to tell you that Jeremy (Jez) Robinson will shortly be taking on a new role as sales director for Kokomo, while out in the Far East, Thierry Bourret has left Marvin’s Magic to join Classic World as international sales director and Gary Lawton will be leaving Tesco on 2nd October for a new role at Warner Bros. I’m off to watch some old episodes of ‘Deal or no Deal’ – maybe there will be some clues as to what to do there?
