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Charting a clear course face-to-face

Toy World’s Tom Roberts caught up with Nicolai Lindhardt, Tomy Europe’s executive vice president, to find out his perspective on where Tomy Europe is going, what has been achieved so far, and what we can expect to see from the company over the coming years.

Tell me how you came to be in your current position. I am not new to the toy industry, having previously worked for Mattel. When the opportunity at Tomy came up I was very excited about it, especially after learning more about the future opportunities for Tomy. Personally, I think the acquisition of RC2 was an interesting move, very much in line with Tomy Japan’s desire to establish itself as a truly global player. The acquisition makes Tomy one of the only companies that controls its own distribution in all markets, particularly Japan, where it dominates, and the US and Europe.

What was the aim of your appointment to the post of executive vice president? The integration process was proving difficult for Tomy Europe, as any integration process between two companies is. It became very clear that the company needed a fresh set of eyes and for someone to come in and set a clear direction for the European operations. I’ve been in the job for a little over six months now,

and we’ve already gone through the rigorous exercise of analysing our business, meeting retailers and key partners, learning more about the different markets we operate in and identifying the opportunities. What separates us from some of the other major toy companies is that we are not just a toy company, we also have a great portfolio of nursery brands, including JJ Cole and Boon. We also have our own product development teams based in the UK (for Europe), Chicago (for America) and Tokyo (for Japan). This grants us a great deal of flexibility and the ability to adapt to the cultures and demands of local markets.

Does this mean that we could see a centralisation of your European operations taking place? Unlike some of our competitors, we continue to view Europe as one region, but not one market. Cultures are different, properties are different by market, buying behaviours and values are also different from country to country. The London office is our pan-European HQ, but we operate subsidiaries in France, Germany, Spain, and the Benelux Countries. All of these offices have the ability to identify local needs and enable knowledge sharing between offices. So, we are not going to centralise our operations in the European market, but where there are synergies between offices we will of course look to utilise them.

How have you approached the job of defining a clear path for Tomy? From the research we have carried out, the outside perception is that the last 18 months have been difficult for Tomy, but a lot of retailers expressed their desire to see Tomy get back on track. The research showed us that Tomy has a great reputation for making innovative toys with excellent play value. Tomy is best known, throughout Europe, for its infant lines, and what customers have come to expect, as one retailer said, from the “traditional Tomy toy” is an item that delivers

excellent play value and smiles from children. We have been looking at what we offer, and there are certain categories and brands that we’re going to stop doing. So, as the industry will see, Tomy is going to be a lot

more focused on providing what works. We’ve identified all the SKUs that will continue to be distributed, by applying the famous 80/20 rule. We’ve also taken the time to identify which markets are key for us, and those that we think will deliver growth in the future. For example, we hear a lot of people saying that traditional toys are not going to be around for much longer, but they said that ten years ago, even fifteen years ago. I still think there are great opportunities for traditional toys and smart toys, whether they be interactive, app- driven, able to integrate with a phone or tablet. We will also be focusing a lot of our efforts on retail execution, with a view to creating brand statements at retail. I believe that the toy industry, like many others, is changing, and as a company, we must too. Effectively, we are working to future-proof our business by working to better meet the requirements of our customers at all levels.

What lines can we expect to see featuring most prominently over the coming months? Chuggington is a brand that’s really close to my heart, and the new series, which just launched in the UK, is delivering on all fronts, and we can see from the ratings how popular it is with viewers. We have a lot of great products coming out in this range and we’re really excited to see how they perform. Battroborg, the motion-controlled battling robots, was awarded Toy of the Year in Belgium and France, and early results are looking pretty good. TV advertising started mid-October and the UK uptake has been highly positive. It’s a £50+ price point product, so there was some nervousness about it at retail, but even taking the economic climate into consideration, if you bring out the right product consumers will buy it. Tomy Pocket Money features a vast array of

properties including Furby, Planes, Transformers, Hello Kitty, and Disney Princesses. The range has seen significant expansion since its launch, and it will be an important area for Tomy going forward. Pokémon will see significant investment over the coming year, and we see great potential, especially now the new X&Y game content has launched. Our brands, Big Farm and Britains will also see a lot

of developments over the coming year. Recognising the importance of impactful packaging

in delivering strong brand messages, we will also be overhauling our current infant and toddler toy range, the Big Farm and Winnie the Pooh ranges, to enable them to better stand out on the shelves.

How do you feel the UK market has performed this year?

I think the good weather over the Summer helped quite a bit, before that I was aware that some retailers were

sitting on a lot of inventory. In the last two months we’ve seen some positive signs here and there, not just in the toy industry, but in the economy at large, but it’s still a challenge. Tomy has experienced double digit growth this year, and this has been driven largely by the UK market. Online sales will continue to grow, but there will always be a need for the bricks and mortar stores. Consumers today are much more demanding, and for the retailers the challenge is clear: unless you can provide great service and knowledgeable staff, it will be a challenge to compete with large online retailers, some of which are looking into opening up their own bricks and mortar stores. As for the future? I believe we will continue to see a good balance between bricks and mortar stores and online stores. The individual retailers will have to analyse its own mix of online and in-store and see what works for them. My belief is that first-time parents, and other consumers, need good advice on that first toy or nursery purchase, and in some cases you can only get that in a bricks and mortar store. But online is a great opportunity for retailers, it’s

Nicolai Lindhardt

just how they choose to do it. For example, the web has allowed us to do market research much more efficiently. In the past, the amount of phone calls we would have had to make would have been huge, now you can simply use Facebook, Twitter, etc, and get the same volume of responses back in hours, not days.

Finally, are there any upcoming developments we should be aware of? I can’t be that specific, but the integration of Tomy and RC2, and the global reach this grants the company, has made it a very attractive potential partner for entertainment companies. The culture at Tomy is very entrepreneurial,

and we are able to adapt quickly to new needs and opportunities; the trade will definitely see much more of that over the coming years.

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