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The shape of things to come… it’s the Friday Blog!

Published on: 9th September 2016

The Sainsbury’s acquisition of Argos has finally been completed. I received numerous copies of CEO John Rogers’ email to suppliers (sent to me in error, obviously), but it didn’t contain any bombshells. It did, however, reassure suppliers that existing agreements, as well as current contacts and trading relationships, would remain in place, but inevitably missed off the crucial words for now. Change has already begun though; it has already been announced that Sainsbury’s will be opening 30 new in-store Argos outlets by the end of the year. There is also talk of up to 600 head office jobs being at risk, although conversely Sainsbury’s has put on record that it has no plans to close either Home Retail Group’s head office in Milton Keynes or Sainsbury’s non-food management office in Coventry (for now?). Make of all that what you will, but we must assume that – like Brexit negotiations – there is much more going on behind the scenes than we’re being told about just yet.

Interestingly, I have heard from several suppliers that Sainsbury’s quality control policy is far stricter than Argos’s, so it will be fascinating to see how that pans out next year.

Elsewhere on the retail front, Asda’s latest results mirrored Toys R Us’ recent announcement in that its turnover was down but profits were up significantly. The performance was attributed in part to the slashing of overheads and shrinking of staff numbers – a reduction in the number of senior directors on the payroll alone saved a not insubstantial £1.6m. In a week where John Lewis announced it would be creating 500 jobs at two new regional distribution centres, while M&S revealed that it would be cutting 500 head office jobs, I wonder whether this is the shape of things to come. Will we see a subtle shift in retail staffing priorities over the coming years?

Maybe all those Asda directors could apply for a role at Sports Direct – judging by the wads of cash Mike Ashley carries around (as revealed online this week), he doesn’t seem to be short of a bob or two. Mind you, I guess that’s what happens when you don’t pay staff properly…

Oh, and Shop Direct posted record profits in its first financial year as a purely online retailer – the shape of things to come part two?

Going back to Toys R Us, the US operation revealed its list of top toys for Christmas this week, which you can see here. It will be worth keeping an eye on how the UK list compares, but of course many of the lines won’t be coming to the UK until 2017, so it also gives a good idea of what lies ahead. Nice to see Worlds Apart’s Selfie Mic nestling in the top 15 amongst all the global big hitters.

Quite a few toy companies appear to have containers aboard vessels operated by stricken South Korean container line Hanjin. I hope the situation is resolved soon, and suppliers and retailers manage to get their goods in time for Christmas. But the broader picture is worth bearing in mind; Hanjin is the world’s seventh-largest container line and has been unprofitable for four of the past five years. If it’s that hard to make money in the shipping business, and demand is unlikely to increase in the short term, surely prices have to rise?

In the licensing arena, I hear that Justin McGiffin has joined Rovio as licensing director hardlines for EMEA. With BLE just around the corner, I’m sure there will be more comings and goings and general gossip from the licensing community over the next few weeks. I am hearing a few murmurs about show organiser UBM introducing new arrangements for licensors wanting to sign up to exhibit at next year’s show – it will be interesting to see how exhibitors feel about the new approach.

Finally, I wanted to share this tweet from Toys R Us with you for two reasons. One, because I found it genuinely funny and laughed a lot (not something I can say about most corporate twitter accounts). But second because, in amongst all the refocusing of roles in the retail community, there is still a job where someone is paid actual money to send stuff like this out. What a time to be alive…

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