Peter Jones, director of sales, Reeve and Jones WHAT
DOES THE LAY OF
THE LAND IN THE SPECIAL TY MARKET LOOK LIKE AT
2009 AND 2010? In many respects, I think the end of 2009 looks better than the end of 2008. That isn’t to say that I think things look great, but I think the bulk of the damage was done at the end of 2008. Consider the environment leading into fourth quarter of 2008. Most specialty folks were having a fair-to-middling year and were looking forward to a strong finish. Based on the prior year, people stocked up on inventory early and took more chances with smaller, unproven products. When 2008 tanked, retailers and manufacturers carried excess inventory into 2009 and spent the first part of the year choking through it. Coming into fourth quarter this past year, both stores and manufacturers were very cautious with inventory levels; we certainly were. It also seems that retailers were taking fewer chances on new products, preferring to channel their often-limited open-to-buy budgets toward proven sellers and manufacturers that were able to offer extended dating and freight. This is the kind of environment that is challenging (to say the least) for a relatively new, small company such as ours. We weren’t able to offer the great dating or freight terms that specialty retailers were really looking for. I think the good news for 2010 is that the challenging economic environment of the last 18 months or so has really weeded out the weaker players. If you are still standing in January 2010, you’ve probably got a stable THE END OF
INTO
and (hopefully) profitable business. With any luck, we’ll all continue to put the hard-earned lessons of 2008–09 into practice and see the benefits in the years to come. DO
YOU FEEL THAT THE
ENSURE TOYS ARE SAFER?
CPSIA
WILL HELP
I certainly think that most people think toys will be safer. Perhaps my view is cynical, but I tend to believe that a law is successful only when all parties involved (both on the manufacturing and enforcement side) work together to achieve full compliance. Already in the news there are stories of kids’ jewelry makers substituting cadmium for lead in their jewelry. Cadmium is also toxic at certain levels. My bigger concern has to do with the unintended consequences of CPSIA. The specialty toy business began—and thrived for many years—because of its ability to find and offer unique toys not available in mass-market toy departments. The additional costs (and they are not insignificant) associated with the new testing requirements will certainly doom many items not generating a large enough sales volume. Manufacturers will be forced to dump lower-volume specialty toys, as the amortization of the testing will push the product cost too high. Such a trend could ultimately challenge the specialty toy market’s ability to keep its cachet.
42 TOYS & FAMILY ENTERTAINMENT FEBRUARY 2010
Randy Compton, CEO, Think-a-Lot Toys HOW
HAS THE CONTINU-
ING WEAK ECONOMY AFFECTED THE LANDSCAPE OF THE SPECIALTY TOY INDUSTRY?
In some ways this economy has helped the specialty toy industry. It has forced families to focus on getting the most play value for the least amount of money—and in many cases this means returning to the kinds of toys and games that are found in specialty stores. And, in my mind, the specialty toy industry is king in providing the best value in entertainment. In fact, this economy has helped people see that behind all the bells and whistles of consumerism lay the tried-and-true qualities of simple, face-to-face contact and fun, engaging play where wits and social interaction rule. Families actually like getting together and playing together and, in some cases, it has been a neglected form of entertainment. Too often, people buy the latest, greatest technological toy that costs a lot of money, but takes them toward the famous “flat, blue screen” instead of a live human being where we learn how to be and interact with one another. In addition to providing high-quality games with high play values, the specialty toy industry provides a level of personal customer service that the mass markets can’t touch. Think about it. A customer goes into a specialty store and more often than not gets someone who knows toys and games and can recommend a wide variety of options that are creative, fun, and often educational. Overall, the customer is getting a lot of service value by going to specialty toy stores. This is not to negate the fact that the specialty toy industry has been impacted by consumers who are weary of opening up their pocketbooks and mass retailers that are slowly adding more specialty games to their mix.