After a veritable whirlwind of a year, we’ve arrived at the last Friday Blog of 2018. Of course, for many retailers, there is still a massive opportunity to boost sales over the next four days. According to NPD, the last time Christmas fell on a Tuesday (in 2012), the weekend before the big day saw record sales. I’m not sure that is a realistic aspiration this time round. However, taking into account that today will be payday for many people, this weekend could still see peak craziness being hit in many toy stores. Let’s hope so, as NPD’s November data suggests that even Black Friday wasn’t enough to pull that month’s numbers round, with a 12% drop in value being reported.
The Entertainer’s acquisition of the Poly toy retail chain in Spain was officially confirmed this week. It’s a great opportunity for The Entertainer to stamp its identity on the 57-store chain, which previously held 5% of the Spanish market – the initial aim is to regain that share, and few would bet against that happening. The Poly brand will be retained, but changes are already being implemented, with the Addo Play range being immediately introduced to the product mix and buying now being managed from the UK. Some would say that the Spanish market is rife for a shake-up and The Entertainer strikes me as just the operation to do it.
A Sky News report at the back end of last week suggested that Hamleys might also be on the verge of being acquired, although – in truth – it is a rather speculative piece. It is no great secret that the relationship between Hamleys and its Chinese owner C.banner is not in a great place, and it may well be considering moving Hamleys on, providing it can strike the right deal. However, whether the three parties named in the article (The Entertainer, Smyths and Mike Ashley) are genuine contenders is another matter entirely. I’m not fully convinced that Hamleys would fit into the two toy specialists’ portfolios, while Mike Ashley is notoriously unpredictable in these situations. He is frequently linked with retailers for sale, but often fades away when push comes to shove. The story even suggests he would only be interested in a ‘cheap deal’; it’s as if he is shopping for bargains in the January sales, rather than seriously contemplating a bid. It will be interesting to see what transpires in the New Year, or if this story flushes out any other interested parties (usually the reason behind a media leak of this sort).
And for those people wondering why I said such nice things about C.banner in the Hamleys documentary which was shown on TV last Sunday, in my defence it was filmed around eight months ago. Also, I do try my best to be positive about the toy market whenever I am being interviewed by the media – there are enough people queueing up to have a pop at the toy industry already. For those that messaged me while the programme was on, yes I did know I was on TV; yes, you can have my autograph and I was paid the princely sum of £1 (obscure TV lore), so no, I won’t be giving up the day job for a new career in TV punditry.
I had a huge amount of feedback to last week’s Amazon comments, mostly from toy companies affirming that they had experienced similar demands. One also explained the impact that losing its vendor manager a year ago has had on its business with Amazon; after several years of exceptional growth during which Amazon grew to become its number one account, this year has seen a significant decline in turnover. I hadn’t fully appreciated just how important the vendor management role was in guiding suppliers through the maze and helping to orchestrate pricing and promotional activity to maximise sales. Now that only the top ten or so toy companies will have access to such an individual, one wonders how many other companies will be affected in this way?
Meanwhile, the Wall Street Journal has reported that Amazon is rethinking its strategy for items it describes as “Can’t Realise a Profit” – or CRaP for short! Although toys are not specifically mentioned, the article does refer to sub-$15 items that are expensive to ship because they are heavy or bulky, so it is not beyond the realm of possibility that some toys may fall into the CRaP category in the future. The article also suggests that the move illustrates “Amazon is not afraid to throw its weight around with vendors, because of its dominant position online.” What a contrast with the position adopted by Amazon executive Lesley Smith when talking to MPs this week, when she tried to play down Amazon’s stature by saying: “Only 18% of retail sales are online and we are a relatively small part.” If MPs fall for such disingenuous nonsense, it will be disappointing – maybe Lesley is the one who should be cutting the CRaP? Anyway, if Amazon really wants to cut down on the crap on its site, perhaps it could start with the counterfeit and unsafe products being listed on Amazon marketplace by third-part sellers? Just a little Christmas thought….
Congratulations to Nick Thomas on his well-deserved promotion to general manager of Vivid UK, while I gather that Adrian Whyles has left University Games – we’ll be bringing you news of his new role in the New Year. I’d also like to wish Barry Harding a long and happy retirement: Barry has worked in the toy trade since 1976, when he joined Fisher Price. He told me that he has had “a fantastic time in the toy trade and made some great friends – but now it’s time to relax.”
That’s a sentiment I can echo right now, if only for a brief few days before the madness of Toy Fair Season kicks off in the New Year. So, on behalf of the entire Toy World team, may I take this opportunity wish you all a very Merry Christmas and a Happy New Year. Today is our last email newsflash until normal service resumes on 2nd January. Have a wonderful festive break.