from the I
n a recent Friday Blog, I made the observation that there are some weeks when I sit staring at my computer screen on a Thursday afternoon
wondering how on earth I am going to fill the blog. I went on to say that the particular week in question was certainly not one of those weeks. The period following Toy Fair season can sometimes be a low-key affair from a news perspective; major announcements are often timed to coincide with the fairs themselves for maximum impact, while post-show, suppliers and buyers retreat into planning mode, keeping their heads down while they weigh up their options for the year ahead. It usually takes selections to be confirmed before things truly start to move forward once more. However, this year has followed a markedly
different pattern, with several major announcements being made over the past few weeks. First it was revealed that Mattel had tabled a bid to acquire Mega Brands in a $460m deal. Having spent more than a few years in the industry, I’ve seen my fair share of takeovers, but this is certainly the biggest toy trade acquisition for some while. In hindsight, it wasn’t a massive surprise. The construction market – one of the few super-categories in which Mattel hasn’t previously been represented – has been the most buoyant toy sector across the globe for the past few years, and has continued to show consistent, healthy growth despite the general economic malaise. The success of Construction Toys has had a significant impact on competing categories such as Boys Action, and it shows few signs of slowing up. Lego has grown to become the second highest turnover toy company in the world, and its profits are believed by some to have eclipsed those of Mattel. It was only a matter of time before Mattel decided to do something to address that situation. Having seen Hasbro struggle
publisher John Baulch - @Baulchtweet
to establish its proprietary Kre-O construction brand, it’s likely that the Mattel board saw acquisition as a preferable route to market. Mattel and Mega had already collaborated on the Barbie construction range, which in hindsight could be seen as something of a test. The fact that the deal keeps the royalties in-house – which is also true of the previous Hit acquisition – could only have made the financial case for acquisition stronger. Ultimately, time will tell whether it was a good deal; Mattel has certainly had its fair share of disastrous acquisitions in the past, but I have a sneaking feeling that this will prove to be one of their better pieces of business. $460m doesn’t look terrifically extortionate, especially when you consider that Mega isn’t well-distributed in a number of territories in which Mattel is strong. I would be surprised if there is any significant change in the day-to-day running of Mega Brands in 2014; it’s the years to come which will show how serious a challenge Mattel can mount to Lego’s dominance of the sector. As if that wasn’t enough, top-level personnel changes have come thick and fast throughout the month. First it was announced that Chris Spalding would be leaving his role as managing director of LeapFrog to become chief executive of the HTi Group. Next we learnt that Neil Bandtock had left his position as managing director of the Vivid Group. Finally it was revealed that Toy Fair ‘supremo’ Simon Pilling would be moving on at the end of April after five years in the role to start his own marketing and events business. The BTHA has started the search for his successor, and we’ll bring you further news of Simon’s new venture as soon as we can. In addition, anecdotal feedback suggests that a number of major buyers have confirmed selections relatively promptly this year. This can only be a positive thing for the toy market as a whole; the security of a supplier knowing where they stand on selections enables them to firm up their own plans just that little bit quicker, and the knock-on effect for companies like us is hugely welcome. Hopefully the optimism which is becoming
increasingly evident in political and economic circles is filtering through to the end consumer,
and that in turn is allowing retailers to be more forward-thinking in their ordering process. With the CBI recently reporting that retail sales are rising at their fastest pace in two years, it does seem that confidence is already returning throughout the retail chain. The fact that George Osborne announced in the budget that he has revised his growth forecast for 2014 upwards won’t have hurt either. I’m delighted to say that this is our largest-
ever April edition, so hopefully that suggests the general air of positivity is beginning to rub off on toy suppliers too. This issue contains all your regular favourites, as well as an extensive section devoted to the Pre-school category; the feature is packed with news, brand new launches and licensing information relating to the Pre-school sector, making it by far the most comprehensive and focused resource for any toy retailer looking to evaluate their Pre-school offering. We also have comprehensive features focusing on the Games and Puzzles, and Action Vehicles categories, an article on the massive sales opportunity presented by the forthcoming World Cup and an exclusive interview with AIS’s Joyce Daly, who will be retiring at the end of next month. AIS has firmly established plaY-room as a successful venture, and with the group’s Independent Toy and Gift Show just around the corner, it seemed the perfect time to catch up with Joyce to reflect on the events of the past six years. I particularly like her (no doubt affectionate) description of the toy trade being “largely run by individuals who set out to make the simple process of buying, selling and making a profit as complicated as possible”.
It echoes one of my favourite business-
related quotes of the past month: “There are two ways to do business: collaborative or difficult.” Thank goodness the majority of our customers prefer the former approach to the latter. Next month will see the Toymaster show taking place, and our May edition will include an extensive preview of the show, with a round-up of some of the key new products and ranges to look out for. In the meantime, I hope Easter proves to be a profitable trading period for everyone, and the Toy World team looks forward to seeing you at one of the forthcoming events.
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