Allegedly
Saban’s decision to change its master toy partner for Power Rangers came as a surprise to many. According to my sources, there was a hard-fought, four-way battle to secure the brand, with Hasbro emerging victorious, even though only a few weeks ago, another company was believed to be in pole position. In the end, the decision seems to have been driven by Haim Saban personally, with his desire to ultimately sell the brand a few years down the line likely to have been a key factor. Equally, Hasbro’s desire to increase its IP ownership will have made Power Rangers an enticing proposition. Much has been made of the strong relationship between Haim Saban and Hasbro CEO Brian Goldner, who ran Bandai Namco in the US back in the 90’s; while I have no doubt that played a crucial part in proceedings, I think it is fair to say that the size of the cheque would also have been an important consideration. Bandai will look after the brand for the next 14 months, so we’ll have to wait until next year to see what Hasbro will do with their new acquisition… The US TOTY Awards were memorable for several lively speeches, in which ‘beef’ was most definitely the order of the day. Zuru’s Nick Mowbray kicked things off by thanking MGA’s Isaac Larian “for all the publicity on LinkedIn”, while Isaac responded by thanking “WowWee for sticking it up that bald guy from Zuru.” Dull it most certainly wasn’t! On a friendlier note, The Entertainer’s Stuart Grant was thanked in two separate speeches - I’m not sure that any major US buyers got a mention, so for an international buyer to be recognised in that way was quite something… Argos trading director Andy Hannan will be leaving the business shortly (if indeed he hasn’t already done so). I don’t know whether this development heralds another round of integration / rationalisation within the Argos and Sainsbury’s empire, but it does mean that no Argos trading directors have survived the merger process, which in itself is an interesting scenario… Credible rumours are circulating that several retailers are in advanced talks to acquire parts of the Toys R Us store estate; The Range is rumoured to be looking at anything up to 30 sites, while Smyths and B&M have both been mentioned as interested parties. Negotiations won’t be entirely straightforward; many of the rent deals that TRU were paying were wildly over-priced, based on historic expectations of turnover that just aren’t there anymore. Add exorbitant business rates to the equation and the fact is that, in many cases, the numbers simply don’t add up. In reality, landlords will have to accept significantly lower offers to seal the deals. It will be interesting to see if they are prepared to do that… With large swathes of the country affected by ‘the beast from the east’ early last month, many stores took to social media to let customers know that they were closed, or that their opening hours were being severely curtailed. However, there was a silver lining; many retailers who could physically open their doors were rewarded with bumper sales of sledges. The Entertainer got in touch to say that they sold more sledges in a week than they had in the last five years, a feat replicated by many independent stores. I doubt there will be many stock rooms full of unsold sledges this year…
Toy World 122
Following news about Toys R Us and Maplin going into receivership, investors and fund managers started to get nervous about retail stocks in general, and poor old Mothercare found itself right in the firing line. Mothercare’s share price plummeted, not helped by an announcement that the retailer was in talks with its lenders about a potential breach of its banking covenants. While retail ‘experts’ and observers have lined up to make doom and gloom predictions about what happens next, I’m going to take a contrary view of the situation; one of Mothercare’s main competitors is about to disappear, and £50m of nursery turnover is up for grabs. Surely – surely – Mothercare has a plan to secure a chunk of this figure? Given its precarious position, the potential extra turnover would offer it an invaluable lifeline, so I can’t believe that it doesn’t have a strategy in place. If it fails to increase its sales with one of its largest rivals out of the picture, you really would have to wonder what the future holds… And lest you should think that the UK retail sector is the only one being buffeted by economic headwinds, the French market has been hit by the news that La Grande Recre, the country’s second biggest toy account with 250 stores, is in major trouble. The only reports I’ve found so far are in French – testing my recollection of A-Level French to its very limits – but it seems that a 75m Euro credit application has been refused by banks, and with suppliers not yet paid for Christmas deliveries, the prognosis doesn’t sound good. Its troubles have been blamed in part on aggressive trading policies of Toys R Us, which is perhaps mildly ironic – while it also illustrates the damage that a struggling business can cause for its competitors… The current sense of foreboding in the US market can only have been exacerbated by President Trump suggesting the introduction of sizeable tariffs for Chinese imports, with toys specifically mentioned as a category being targeted. In the past, this might have been dismissed as political rhetoric, a knee-jerk threat unlikely to come to fruition in the real world. But this is President Trump we’re talking about, so clearly anything is possible… Amidst all the doom and gloom, I searched for something to bring a little levity to the close of this month’s column, and I found it in the most unlikely place – Bloomberg. Forget headline of the month, this is surely the headline of the year. I am sure the immortal phrase ‘CEO Bake-Off’ represents the very latest, cutting-edge corporate jargon, but what if it doesn’t – what if Disney really is making its two top executives go head-to-head in a baking challenge to determine who gets the top job? Wouldn’t that just be the best thing Disney has ever done (and I say that as someone who thinks ‘Up’ is one of the best movies ever made). If only Bob and Kevin were actually being asked to make a croquembouche model of themselves, to be judged by a smirking Paul Hollywood I’ll leave you with that tantalising thought.