John Baulch reports from this week’s Toymaster Supplier’s conference in Swindon.
This Wednesday, I joined a room full of toy suppliers keen to hear Toymaster offer further insight into its largest member Trod’s recent administration process. Indeed, the fate of Trod and its potential repercussions was just about the only topic of conversation prior to the presentation commencing. However, it was probably a measure of the extensive information provided by Toymaster in advance, and also during the meeting, that when questions were sought from the floor, only one was raised and even that only indirectly related to Trod.
Toy World covered the story extensively when it originally broke, so I won’t go over old ground. However, some additional detail was provided by Ian Edmunds at the meeting: Trod’s annual purchases amounted to £5.6m (NB not £49m as has been erroneously reported elsewhere), approximately 10% of Toymaster’s turnover. A ‘sizeable’ provision has been made for potential losses as a result of Trod’s administration in the 2015/16 accounts, which will mean that despite Toymaster trading profitably (70% of the individual members increased their turnover last year), this will result in the company making a loss for the first time in nine years. Therefore, no brand enhancement will be paid to members this year, while the bad debt reserve has been utilised.
Despite this, Ian re-iterated that Toymaster had put a range of measures in place long before the Trod situation arose which will ensure the long-term viability of the group, which includes refusing membership to online-only accounts; increasingly stringent financial criteria for new members; restrictions on members increasing their store portfolios and closer monitoring of members. It was also confirmed that Toymaster would not engage in ongoing dialogue with certain large retail groups which had approached them over the past year, and would focus on supporting its independent base.
The timeline of events leading up to Trod’s administration was quite interesting: for those that weren’t aware, Trod first joined Toymaster back in 2007, when it operated out of one small ‘bricks and mortar’ shop. From there it branched out significantly into the online sphere, and by 2011 it was Toymaster’s biggest member. Apparently things first started to go awry at the end of 2012, when Trod suffered a poor Christmas after what Ian Edmunds described as “Amazon changing the rules.” The board subsequently took the decision in January 2013 to support Trod through its difficulties. A year later, with problems at Conways to contend with, a decision was taken not to address the Trod situation and exacerbate things further. Trod is then said to have traded profitably in 2014, so the board decided in January 2015 to continue to support it. It was in September 2015 that things took a significant turn for the worse, after owner Daniel Aston reportedly suffered some major health issues. Turnover rapidly dropped below anticipated levels and, sadly, the rest is history.