Weathering the storm…it’s the Friday Blog!

Published on: 11th March 2022

It has been a relatively busy news week in the toy community – which is good, because it helps to have something positive to focus on instead of the heartbreaking situation in Ukraine or the fact that Covid cases are once again on the rise in the UK (even though this is being kept off the front pages by the lunacy we are witnessing in Eastern Europe). In both my personal and professional circles, I know more people who have caught Covid over the past few weeks than at any other stage of the pandemic – although thankfully, most of them have had the mild version. I can, however, say with some degree of certainty that this isn’t over, by any means – so don’t throw away those masks just yet.

There are few certainties in life, but Lego reporting another strong set of financial results is one of them. Last year’s annual results saw the company increase sales by a whopping 27%, with global revenue jumping from $6b to $8b. A mightily impressive performance – and who would bet against a repeat of that in 2022, despite the fact that Lego itself has warned growth could slow to single digits over the next twelve months.

There was also a major acquisition to report, as gaming behemoth Embracer Group acquired Asmodee for a cool 2.75b Euros. The good news for the Asmodee UK team and its retail partners is that the announcement confirming the deal also stated that the current management team will stay in place, the company will continue to operate as normal, and no reorganisation is anticipated. To be fair, why change a winning formula?

There was a strong opening weekend for The Batman, both here in the UK and across the globe. This not only bodes well for Batman licensees, but for licensees of other blockbuster movies due this year – it seems that cinema goers are finally returning in the kind of numbers we would traditionally associate with big film launches. There will be a big feature on one of those blockbuster movies – Jurassic World: Dominion – in the April issue of Toy World, teasing some of the product that will be hitting shelves next month ahead of the movie’s release in June.

Although cinemas are finally fighting back, agencies tell me that elsewhere in the media landscape, some traditional elements of the kids’ viewing universe continue to struggle – especially linear TV, which has seen quite an alarming drop in viewing figures since Christmas. If this decline continues – and from what I hear, most observers expect that to be the case – there will be plenty of Q3&4 media plans having to be rewritten in the coming months. To add a further twist to proceedings, Disney + announced this week that it will start selling ads on its channel – this process will start at the end of ‘22 in the US and roll out internationally in ’23. When we ran the story, it even took a few seasoned media experts by surprise – without doubt this will add a new dimension to many toy advertisers’ plans moving forward.

If the media landscape is rapidly evolving, so too is the retail landscape: this week saw Amazon announce plans to close all 68 of its UK & USA brick-and-mortar bookstores, pop-ups and shops carrying toys and other consumer goods. Turns out this retail lark isn’t that easy, after all. Seriously though, there is a kind of delicious irony in the closure of Amazon’s failed ‘4 star stores’ experiment. Imagine being thwarted …by yourself. I would love to have been a fly on the wall at that meeting: “It’s not our fault, it’s just…well, it’s not easy to complete with these bloody online giants like…oh.”

I was extremely sad to hear that Cartamundi’s Steve Webb passed away recently. So many of his former colleagues from One for Fun and other industry friends posted moving tributes to Steve on social media – he was obviously an incredibly popular and inspirational person, and everyone is clearly going to miss him.

I am sure we were all hoping for a quieter year this year – a bit of a return to normal. Instead, as we approach the end of a tumultuous first quarter that none of us could have predicted, I think we all accept that this is going to be another year full of challenges – many of which will be way beyond our control. Oil, gas and petrol prices are heading upwards at an alarming rate, just as extra tax and national insurance contributions and reduced benefits kick in. Add inflation at a rate none of us has experienced in the past couple of decades and it is clear that this is going to have a huge impact on the disposable incomes of many households. The prevailing economic winds are going to severely test the theory that the toy market is immune – or at least heavily resistant – to such financial turbulence.

However, we have weathered some pretty lively storms over the past few years, and I genuinely believe we can weather what ’22 has in store for us. There are some positives from the events of the past two years, and one is that many parents have spent more time with their children, and hopefully they have seen at close quarters just how much joy and comfort toys can bring to their kids in difficult times. Maybe this will make them feel that buying toys is a good thing, and something to continue doing as long as their financial circumstances allow. I do hope so.