Company Profile - The Entertainer

A new chapter for The Entertainer

As the Grant family takes its final steps away from The Entertainer, the retailer is undergoing a strategic shift, signifying a new era for the company. Toy World’s John Baulch and Caroline Tonks took a trip to The Entertainer’s headquarters in Amersham to sit down with Andrew Murphy OBE, CEO of the Teal Group, to discover what changes the industry will see in the coming months.

In August, it was revealed that the Grant family is stepping away from the business, placing its entire shareholding into an Employee Ownership Trust. Tell us a bit about what that is going to look like internally.

Moving to the Employee Ownership Trust (EOT), we’ve created a Trust which is the legal owner of the business, called Ludus (which is Latin for ‘to play’). The Trust will have a board of three trustees: Duncan Grant, Gary’s eldest son, Callum Lafferty, the employee representative, and Patrick Lewis, the Independent Trust chairman, who has considerable previous experience of these roles.

Patrick’s position is not the same as being chairman of the company board, which runs the business. The Trust is at arm’s length, looking at two main things. First, is the business that’s powering us meeting the economic requirements of the Trust? And second, is our management upholding the standards, values and principles of the Trust? As an EOT, everything we’re doing must be in the best interests of our employees.

In the short term, I will chair the board that runs the business. There may be a future when we bring in an external chair, but for now, we’re continuing to grow into this new chapter. I will maintain strong ties with the Grant family, calling on that bank of knowledge as we continue to play to the strengths of the business. I fully expect to be speaking to Gary most weeks!

What does Gary Grant’s relationship with The Entertainer look like now?

Gary has almost fully stepped away; at the time of writing, he has only two days left at the office when we will spend most of our time together. 26th September marks signature day when he will mark the end of an era in the Amersham shop with the Trust board. No one can really get their heads around it, and I would imagine that Gary and Cath can’t either. The Entertainer has been such a massive part of their lives for so long. Their son Duncan likes to say: “They’ve had the business longer than they’ve had any of us”, which really puts it in context.

With Gary leaving, what do you believe is the biggest part of him that you’ll have to replace?

I truly believe that much of what Gary is taking away with him is irreplaceable. You can’t replace 44 years of industry experience. You might be able to reach for a few proxies for some of it, but that is not the same. I am taking what he and Stuart Grant irreplaceably brought to the business as a pivot point for change, rather than doing a second-best job of trying to replace those things. We don’t intend to continue exactly as we were; there will be changes as well as things which stay constant as we move forward, but momentum is the most important quality in a business my experience.

Last year, The Entertainer rolled out into Tesco across the UK and has since expanded the partnership into over 2,000 Tesco Express stores. How has that relationship been developing?

Our half price toy sale in Tesco kicked off on 15th September, so for us, peak trade really started then. The sale is running for seven weeks and then we’re into proper peak Christmas. Very little of this stock makes its way into The Entertainer stores. Given we’re carrying such a wide range year-round, we don’t have enough space. The key for Tesco is that it gives us the Power Aisle, which is a really significant extension space that we don’t have in The Entertainer. The vast majority of product is bought especially for this.

Expectations are high; that’s the position with Tesco overall. I believe that the relationship is going very well for both parties, but I would add that the Tesco team is very pragmatic. Like our own team, they don’t get hysterical about problems but talk to us and plan with directness and forwardness. I won’t pretend that it’s a partnership of equals in the true sense, as Tesco is a vast organisation and we’re much smaller; they’re multicategory and we’re delivering just one category for them. But it is much more of a partnership of equals than one might expect. We have a list of areas where the partnership can and will go better, and there are problems that I anticipated that haven’t actually materialised. It’s a huge deal with many moving parts, but in terms of the fundamentals, it’s going as well as we would have hoped.

What does your current store estate look like as we head towards 2026?

The spine of our business is our own stores. Gary and the family took these to a high of 165 locations at our peak in 2023. The deal with Tesco means we have a presence in around 770 stores, and a further 150 with Matalan. Other partnerships are also in the pipeline. The obvious question is: do these replace our stores? And the answer is a resounding no - this is not a cannibalisation of what we already do.

That said, The Entertainer store estate will have been consolidated to 150 stores as we enter 2026; the net 15 that we’ve lost since the high point in 2023 are a result of having 70 lease events since then. Some of the individual stores are in marginal locations where the numbers don’t quite add up anymore, or where we’ve not been able to agree a deal with the landlord. To be fair, with very few exceptions, landlords have accepted that a retailer which is having to cope with 13% additional labour cost as a result of last year’s budget is not going to be able to pay more rent, or even the same amount they were paying before.

My expectation is that we’ll exit 2026 with more shops than we enter with; this is the only year where we will be in a net deficit. And encouragingly, there are already four exciting new stores coming, in Dalton, Rushden, Edinburgh and Aberdeen. Aberdeen is the largest potential catchment area in the UK where we don’t currently have a store, while Dalton will be our first-ever outlet store.

What other changes will consumers notice in-store in the coming weeks?

A major shift that the industry and shoppers will see is that we will soon begin opening on Sundays, and we will have unconstrained ranges in stores. Up to now, Gary’s influence has been everywhere and in everything we’ve done, and we want to respect the Grant family during these changes, so we’ve had to pre-plan a lot. We’ll be adding categories and ranges we have not previously stocked to our product mix: for example, the likes of Halloween, Monster High, Pokemon and a hugely expanded Kidult range.

However, although there will be lots of change - equally, a lot will stay the same. The name isn’t changing, and we’re not trying to become a Smyths or an Amazon. We’re going to stay distinctively who we are, which is a smaller format retail business, with more convenience and more flexibility. However, people who’ve watched the business for a long time will certainly notice subtle changes.

It was recently announced that The Entertainer is withdrawing from Amazon and expanding its Dropship programme. Can you tell us a bit more about what this will entail?

We will stop selling on the Amazon platform. Since the beginning of September, we’ve stopped selling on its Fulfilled by Merchant (FBM) channel, and in January, we will stop selling on its Fulfilled by Amazon (FBA) channel as well.

The reason we’re doing this is that I don’t believe customers know where their toys are coming from when they buy from a marketplace. I think we’re too significant a toy business to want to persist with that when it takes time, energy and particular operational focus to serve Amazon. It’s not even outrageously profitable and will never be the mainstay of our business. I’d rather have our digital and logistical teams focus on serving The Entertainer customers through our own websites.

If you’re interested in really growing your business, and in it having its own identity, Amazon is not the landlord you want. Thinking about Amazon as a landlord is a helpful frame of reference to understand where you really stand with them. But also, one cannot be as critical of Temu and Shein as I am, and neatly segregate Amazon’s marketplace. Being ‘less bad’ on product safety and provenance of items is not really a great defence.

We’re getting a lot of traction from our Dropship offer, which we’re expanding significantly, adding over 4,000 new items to our online range. It’s a huge boost to our business - we want to drive more customers directly to our website, with a significantly enhanced range showcasing new product categories.

Are there any new retail partnerships in the pipeline?

A deal with the Modella Capital Group is days away from being signed. We will be launching our toy offer in TGJones (formerly WHSmith) and in Hobbycraft on a trial basis, before the end of the year. As you can imagine, this is incredibly exciting. We will be providing toys in Hobbycraft and in TGJones on an exclusive basis.

The Toy Box (through which TEAL delivers toy retailing, franchise and wholesale propositions through other retailers) is an almost unique concept; we are one of the few businesses in the world that can fulfil every part of toy retail. We develop product, we have our own IP, we have licensed product, we wholesale, we franchise and we concession as well as run our own shops. The most exciting thing for us is finding new ways to show we can deliver a toy proposition, and this is a new way at a significant scale. If we progress to full roll-out there could be over 500 branches of TGJones and Hobbycraft - and other things to come.

And then in the international market, we opened in Carrefour in Dubai on 24th September. The initial store is in Mirdif city centre, with a further three trial stores of a Tesco type offering rolling out in Q4. It’s not the first time we’ve set up activations outside the UK, but it’s clearly the one with the most potential, given the scale of Carrefour and how significant it is in the toy industry. This deal has been in the works for a long time, having started conversations over a year ago, and it’s something we’re really looking forward to working with Carrefour and MAF to deliver.

I do acknowledge that ultimately, not all of these trials are going to be successful. I am very conscious that as we try more varied approaches in different territories, it’s inevitable that the industry will see us succeed with some and not with others. However, I’m extremely confident in our strategy; an endemic problem that multi-category retailers have is they can’t afford to treat the toy category as the specialism it is; to do it well and profitably they need to partner with a specialist. We’ve made the move into many different channels - garden centres, news agents, groceries and department stores - and it’s hugely exciting for us.

What plans are you making to begin to shift into the burgeoning Kidult market?

We’re very pleased with how Pop Mart is sitting within our portfolio. It’s currently in eight stores and that will increase. We got into the craze just as it went viral. The dedicated Pop Mart Roboshops have been a huge success; the one we have in our Bluewater store is one of the very best performing anywhere. That shop has been spectacular for us.

K-Pop Demon Hunters looks on track to be the next big craze, and I think it will stick around. I believe this is partly because of the scale at which it has taken off; it’s beyond anything anybody has ever seen. The community through which it will spread virally has got an appetite for it to remain. If you’re five- or six-years-old, K-Pop Demon Hunters isn’t niche, it’s your whole world, and you will probably love it for a few years. We’ll be bringing in some non-toy product to meet demand initially, such as posters, apparel, mugs and so on, as it will be a while before toy product hits the market.

In the past, we’ve been very solidly a 12-year and under focused retailer, due to the heritage of the business and the values of the Grant family. We have had to cherry pick Collectibles and Kidult lines, but full range authority was always going to be denied us because too much of the product wasn’t aligned with the family’s values. Now, bringing in such ranges means we’re able to add an entirely new customer target group to our business. The Kidult lines we’ll be adding will probably add to our SKU count by around 20%. There needs to be a meaningful offer to bring in a new target audience, creating the right environment for shoppers and incorporating new elements and ranges.

However, our shops aren’t elastic, and one of the realities of this change is that we are going to have to reduce our existing product range and supplier base. My personal strategy is to speak honestly about the situation as it emerges and to give people as much notice as possible. We simply won’t be able to go forward with the core toy range width and number of SKUs we currently stock – there will be some big changes to our range, but we’ll work with suppliers and try to find the best solution.

Overall, there’s a lot to look forward to and get excited about, as we bring in a raft of developments while maintaining the superb legacy that the Grant family has established over the years.