Category Archives: Toys

Toys ‘R’ Us Regains Ground On Wal-Mart


Citing a recent ReutersreportRetailWire editor-in-chief George Andersonkicked off  last week by bringing an oddity to the attention of our insider retail industry audience:  “Something unusual happened this past holiday season. Walmart gave up share of toy category sales.”

Apparently, a series of missteps, including cutting product selection and failing to add floor space before Christmas, contributed to a less than Walmart-like performance for the selling season. Toys ‘R’ Us took full advantage of the opportunity, in many of its stores offering a selection of 7,000 toys to Wal-Mart’s 1,800. Research by NPD Group pegged toy stores as gaining a half-a-point share during the holiday season while mass merchants lost three percent.

Further, Toys ‘R’ Us brought in a large number of exclusive toys to make sure there would be further differentiation from Wal-Mart and Target.

TRU, which filed for an IPO in May of last year, now has a solid holiday season under its belt. Its U.S. sales were up 5.4 percent in December. After years of learning lessons the hard way as Wal-Mart undermined its business, gaining a bit of market share back from the Bentonville Behemoth at a time when the retailer is looking to raise up to $800 million is good timing indeed.

We asked our RetailWire BrainTrust panel of retailing experts if they thought toy stores as a channel have regained the advantage lost over the past couple of decades to mass merchants.

“Walmart’s poor showing in the toy category and loss of market share can be, in my opinion, directly related to the lagging affects of John Flemming’s ‘Project Impact’ debacle,” wrote Charles P. Walsh, president, OmniQuest Resources. Mr. Walsh spent 15 years working in the Wal-Mart offices, specifically in its Global Procurement Division.

“Walmart plans and executes merchandising strategies a year in advance, and while able to affect assortment changes closer to events, the assortment and shelf space were determined under a different executive leadership direction,” commented Mr. Walsh. “In addition to the reduction in assortment and shelf space, Walmart also made a critical mistake in placing a large portion of their assortments in the indoor garden section which quite possibly rendered it invisible to many shoppers.”

TRU’s concentration on making exclusive deals was seen as a key strategic move by many of our commentators.

“TRU gained share by returning their focus to what they began with—the assortment,” wrote Bill Emerson, president, Emerson Advisors. “They returned to being the ‘toy expert’ as opposed to trying to compete on price with the masters of that game. There’s a lesson here for all retailers struggling to compete with the mass giants—it’s the product, stupid. Give customers a superior alternative in product assortments and you will succeed. Try to compete solely on price and you won’t.”

A number of panelists pointed out an element absent from the Reutersarticle; the influence of online sales on holiday shopping habits.

“As a retailer, toys are a hugely inefficient category,” commented independent consultant Gene Detroyer. “Inventory has to be built and can get out of balance easily; sales are concentrated, price-cuts are common and leftovers are more than prevalent. Given a choice between toys, groceries and consumer electronics, there is no choice. Why turn your store upside down to accommodate toys, especially when the consumer is going online?

“Walmart and Target are likely the winners here. They didn’t risk margin. They didn’t risk shelf space allocation and come January, they didn’t have to deal with toys.”

Certainly, not all BrainTrust panelists took TRU’s recent victory as a harbinger of a sustained trend, nor indication that the big boys are incapable of scrappy innovation.

“If sales were not up at TRU, it would be a death knell in the wake of previous losses and the deployment of hundreds of holiday pop-up stores. (What was the ROI on that?),” quipped Carol Spieckerman, president, newmarketbuilders. “I think Target has done a great job of differentiating its toy offerings through exclusives and going a bit old school/retro with classic and developmental toys while offering at-a-price options to keep traffic flowing. Walmart is not ceding its hard-won toy gains to anyone and a wee uptick from TRU certainly doesn’t prove that Walmart has.”

 


Top-secret Elmo and friends revealed


The beloved red furry monster and his Sesame Street pals are back with a bang, and a band!

“With ‘Let’s Rock Elmo,’ it’s great to be able to bring to life this beloved character like never before,” said Jerry Perez, general manager of Hasbro’s Playskool division, which makes preschool toys.

“Let’s Rock Elmo,” which hits stores in the fall, and is priced at $69.99, sings and plays the tambourine and a drum set. Kids can switch the musical instruments and Elmo will recognize which one he’s given.

Kids can also play along on the instruments. And Hasbro will sell a separate line of “Let’s Rock” instruments that include a guitar and a keyboard. Perez said Elmo interacts with the other instruments, too.

“Kids can actually form their own Elmo rock band,” Perez said. “Elmo knows which instrument you are playing and he will sing along or play along with you.”

Mattel owned the Sesame Street license for 15 years under its Fisher-Price brand but lost the license to Hasbro in late 2009. Hasbro now owns the right for the next 10 years to make and market toys and games based on the characters of “Sesame Street.”

 


New Official ThunderCats Toy Images Released!


Bandai has obviously heard the collector community’s original fearful outcry upon discovering that the ThunderCats line wasn’t picked up by Mattel, because their new ThunderCats Collector Line seems to fit in perfectly with the Masters of the Universe Classics figures.  While the height is listed at 8″, if this is measured from the top of his hair then Lion-O should be in a very compatible height with He-Man and the gang.

The figure is slated to come packaged with a long Sword of Omens, a short Sword of Omens, and the ThunderClaw Glove.  There appears to be a holster coming down Lion-O’s left side, so there is also the possibility that the short Sword of Omens could be sheathed there when not in use.

While Bandai America isn’t exactly known for their high-end action figures, Bandai Japan totally is.  If the looks of this figure are any indication, they may be getting some tips from their overseas branch in the “ass-kicking toys” department.  The articulation looks plentiful and unobtrusive, including a new style of thigh swivel.  This new Lion-O figure is a far cry from Bandai’s Ben 10 assortments!


Toy fair opens in Nuremberg


The Nuremberg Toy Fair, the world’s biggest toy expo, opened Thursday in Germany with one of its focuses on packaging boys’ toys to make them more attractive to girls.

Within an hour of the opening, the city’s exhibition centre was already packed with people. Organizers expect 76,000 trade visitors, mainly purchasing executives and merchants, to visit by the closing day Tuesday.

Nearly 2,700 exhibiting companies from around the world have about 1 million products available in their catalogues. Manufacturers say 70,000 are new, though that includes long-standing toys that are being offered in additional colours or from new plastic moulds.

On Wednesday, toy professionals attended a ‘building our future’ conference in Nuremberg on why toys tend to be firmly aimed at either boys or girls.

Richard Gottlieb, who chaired the discussion, said Thursday in an interview, the photographs on the packaging often spread the message that a boy will usually end up in charge of a science toy or a ride- on toy.

Where girls are shown in the images, they are usually only helpers or onlookers, the US-based consultant said. Gottlieb said he had been urging manufacturers to change the packaging.

The fair also focuses on rising consumer demand for toy manufacturers to be environmentally sensitive. German ecology groups claimed the previous day that plastic used for toys contained too much of certain toxic substances.

 


Toy firm, Cedar Fair offer student contest


K’NEX, a construction-toy company based in Hatfield, Pa., and Cedar Fair Inc.’s Cedar Point amusement park have launched a Great Thrill Ride Build-Off, for middle and high school classes and organizations such as science clubs.

The competition is for the most innovative and thrilling amusement park ride model using K’NEX building sets.

The contest began Monday and runs through April 3. Registered participants will receive a discount coupon to be used for the purchase of materials from knex.com. No purchase is necessary.

Participants must design and build a ride and submit a photo/video of the project on http://www.knex.com. The top five entries are to be displayed during Cedar Point’s Math and Science Week, scheduled May 16-20.


Rising wages in China, Toy Industries in shock!


Rising wages in China are sending a jolt through the world toy industry, prompting a revival of factory capacity in the West, industry leaders are saying ahead of the Nuremberg Toy Fair.

The bulk of dolls on view at the annual toy expo, which opens Thursday in Germany, traditionally are western-designed and carry western brands but are churned out by low-pay, plastic-moulding factories in southern China.

Chinese factories saw timber into wooden blocks, they weld and bolt together ride-on tractors and scooters. They assemble diecast toy cars and electronic robots. In Germany, Europe’s biggest toy market, nearly 80 per cent of today’s toys are Chinese made.

But not for much longer.

For a start, western shoppers are suspicious after several toy-safety scares in recent years involving toxic paint and small, detachable parts that babies might swallow. Chinese factories were blamed.

Now inflation in China is also driving up both wages and factory- gate prices. Officially, Chinese inflation is running at 5 per cent for consumers, but the true figure seems higher. The renminbi exchange rate is up, and China’s supply of cheap labour is running out.

Retail toy prices in Europe seem likely to jump as much as 30 per cent this year, and vendors say China is a major reason for that.

German companies say the prices Chinese factories are asking are getting steeper, and some believe that manufacturing in Europe is affordable by comparison. European inflation and pay are flat.

The trend is likely to be a hot topic at the toy expo, which is only open to the wholesale trade. German professional buyers returning from China say the days when southern China’s factories could rely on an endless supply of cheap migrant labour are over.

‘The workers are leaving to move over to higher-value manufacturing,’ explains Martin Boeckling, chief of a German purchasing cooperation, Spiel und Spass. He says Beijing no longer recognizes toys as a priority manufacturing sector.

Although an estimated two-thirds of toys sold worldwide are Chinese made, the sector contributes only 1.5 per cent of China’s gross domestic product.

Beijing has decided that its available labour resources need to be redirected into manufacturing types that add more value, including cars and electronics.

China is leaving the low-profit toy business behind and there is no obvious successor in the low-wage countries.

In centralized fashion, Beijing would also like to spread factories back to the places where Chinese people live, and reduce the vast migrations by China’s job nomads at times of festivities.

Reducing the concentration of manufacturing in the south would help stop some of the snarl-ups on China’s roads and railways. The rebuilding of those same roads and railways is also sucking away labour.

Otto Umbach, chief of another German purchasing cooperative, Idee und Spiel, adds another point: ‘Chinese universities are graduating 6.5 million people per year. They don’t want to work on factory assembly lines.’

China, he forecasts, faces a shortage of unskilled manual labour. Toy factories will have to hike pay 10 per cent this year.

European importers might be able to absorb that, but not combined with a jump in the price of raw materials and the cost of sea- freight.

‘At the start of 2009 you could land a shipping container in Europe from China for about 600 dollars,’ said Boecklin.

‘Today it’s costing 1,400 or 1,500 dollars.’

Several European companies are thinking of manufacturing closer to home.

Simba Dickie Group, a German company based near Nuremberg, has set up a new factory in France and has modernized its German plants.

Paul Heinz Bruder, head of a small German company, Bruder Spielwaren, is one of those who does not need to return. He never left. He said the logistics of supplying European shops from European plants always made better sense and ensured quick order fulfilment.

 

 


Mattel make Fortune magazine’s 100 Best Companies to Work For


Mattel Inc., the El Segundo-based toy giant, was ranked 69th on Fortune magazine’s list of 100 Best Companies to Work For.

This was the annual list’s 14th year.

It was also the fourth time Mattel has made the list. The company moved up nine spots from No. 78 last year.

The list is based in part on survey answers from randomly selected company employees. Questions include attitudes about management’s credibility, job satisfaction and camaraderie.

The employee survey is two-thirds of the score given to each company. The other third is based on pay and benefit programs, hiring practices, internal communications, training, recognition programs and diversity efforts.

 


Reliance Retail to open 20 Hamleys toy stores in India


Reliance Retail plans to open 20 toy stores of the UK-based Hamleys in India over the next seven years at an investment of Rs 120 crore.

With strong growth for the toy market in India, Reliance retail today inaugurated the second Hamleys toy store at Express Avenue.

UK-based toy store Hamleys holds an exclusive tie-up with Reliance Retail for merchandising its famous toys for children.

“Our first store in Mumbai which is spread across 21,000 square foot has got a very good response. It was a pilot store. Now this is a large store.With this we have plan to open 18 stores in India over the next seven years”, Reliance Retail President and Chief Executive Officer Bijou Kurien told reporters.

The Indian toy market was valued to be at Rs 1,500 crore and growing at a rate of 10-15 per cent every year.

As part of expanding its footprint, he said, “We will open 18 more stores under the ‘Pilot Store-Large store’ strategy.

The investments required would be around Rs 120 crore for opening these 18 stores which would be spread across 11,000 square foot and 21,000 square foot, he said.

Hamleys Global CEO Gudjon Reynisson said they always hold a “local partnership” for merchandising their toys in any country.

“Currently our toys are available in the United Kingdom, Ireland, Denmark.. Wherever we operate we have a local partner…Our association with Reliance Retail is that they have good knowledge about the market and also konw the cultural diversities of a vast country like India…,” he said.

The new Hamleys store has a display of toys for girls and boys.It also hosts exclusive Hamleys merchandise. The store is designed by Hamleys United Kingdom team and the staff inducted were trained at Hamleys Academy .


%d bloggers like this: