similar shortcomings that contributed to their ultimate decline and fall.
OBSERVATIONS OF A TOY INDUSTRY SURVIVOR Jon Salisbury
The recent troubles for video games retailer GAME have brought back memories of the collapse of Woolworths for our columnist…
RECENT REPORTS in our sister publication, MCV, have made for very uncomfortable reading with headlines screaming about the very public collapse of GAME and the closure of a whopping 277 stores with a tragic 2,107 jobs being axed. As we went to press, the troubled video games retailer was saved by turn-around investment firm OpCapita, saving 3,000 jobs. The closest analogy in toy terms would be the seismic shock of the total collapse of Woolworths. A direct comparison would be misleading because Woolies wasn’t a specialist chain and no stores at all were saved. For most of the year, it was the biggest retailer of toys in the UK with 800 stores peddling a wide range of products but, come Christmas, Argos would wrest market leadership away from the wonderful world of Woolies as the killer marketing mechanism that is the Autumn/Winter Argos catalogue kicked in. Although seemingly different on the surface, Woolies and GAME shared similar
Intent Media is a member of the Periodical Publishers Associations
MAY 2012
shortcomings that contributed to their ultimate decline and fall. GAME was only a medium-sized player in its sector, for example. Although the largest video games specialist, it couldn’t hold a light to retail giants like Tesco or Asda. In addition to peerless buying power, those retailers also had the stamina to weather the economic downturn. Woolworths, despite its size, was a jack-of-all-trades but a master of none. The supermarkets even hijacked its Pick ‘n Mix business.
Other factors also played a part in GAME’s trauma. Video games sales have fallen to a level not seen since 2006 and revenues have shifted to the App store, free-to-play gaming and online. Thank goodness toys can’t be downloaded. Playtime, another video games retailer that went bust in 2006, suffered from similar problems. “We found out first hand that it just isn’t possible to run a profitable business on the High Street selling just games,” the retailer’s owner said. Toy retailers must surely sympathise with that dilemma.
ToyNews is published 12 times a year by Intent Media ~ Saxon House, 6a St. Andrew Street, Hertford, Hertfordshire SG14 1JA Fax: +44 (0)1992 535648
As if to add insult to injury, GAME employees were even instructed to buy the PlayStation 3 from Tesco and sell them in stores as pre-owned for a profit. The toy industry equivalent would be The Entertainer, say, buying LeapPads from Argos and reselling them in a bid to make a better margin – not that there is a huge price differential between retailers to be had with toys. Perhaps the tables have finally turned and
it’s time to hold your heads up high and be proud of being a toy retailer. This product category was never really the independent toy retailer’s cup of tea and many of you will be heaving a huge sigh of relief that you didn’t take a punt with those pesky video games.
Jon Salisbury has written about the toy business since 1985, editing magazines and running toy media events in New York and London. He can be contacted at jon@wotkidzwant.com or @JonSalisbury www.wotkidzwant.com
Circulation & Subscriptions
AUDITED CIRCULATION Average Net Circulation:
6,181 July 1st 2010 to June 30th 2011.
SUBSCRIPTIONS UK: £50 Europe: £60 Rest of World: £90 The international cost applies per subscription and covers airmail dispatch of 12 issues
To order your subscription via Visa, MasterCard, Amex Switch or Delta contact toy.subscriptions@c-cms.com or call 01580 883 848. Alternatively visit our website www.toynews-online.biz