Toymaster - Darren Robinson

Indies: it’s time to take stock of your business

The indie sector is facing several economic headwinds this year, compounded by ongoing issues caused by competition, stock management, theft and aggressive pricing. Here, Toymaster’s Finance director, Darren Robinson, guides Toy World readers through simple steps they can take to ensure they’re financially prepared for the months ahead.

Darren joined Toymaster as head of Finance around 18 months ago, in July 2023, but was rapidly promoted to Finance director as Colin Farrow looked to take a step back from the business. Since then, he’s become far more involved in the wider running of Toymaster, joining the board in July 2024 and taking a more active role in the future of the group - including how its members are affected by financial matters.

“Things are becoming harder for indies; they’re up against changing government legislation, the cost of living crisis, global uncertainties and an ageing demographic,” he explains, noting that age concerns apply to members just as much as consumers; as retailers approach retirement age, the question arises of business succession – passing it on to their children, perhaps – as well as whether to sell up, and how to shore up pension plans. “Our responsibility as a group is to assess what we can do to assist members, no matter the stage of business they’re at.”

Part of Darren’s role is to ‘health check’ Toymaster members and offer help and advice where needed. The retail landscape is changing quite dramatically (and will continue to do so), meaning indies must remain aware of what’s going on with their business, both internally and externally, and meet it head on. As Darren says: “You can’t just ignore it and hope it goes away. Ultimately, members may need take a step back and view their business critically, being honest - and unsentimental - about what might need to be done to keep things viable.”

Below, he shares some of the simplest changes indies can make right now to ensure their success long into the future.

• Mitigating increases to National Insurance and the Living Wage

Having come into effect in April, these changes (which formed part of the Budget announced in October 2024) will unfortunately increase overheads for many retailers. Assessing staffing levels may reveal areas where cutbacks could be made to keep staffing costs down, including the hours employees work. Refusing to open on a Sunday, ostensibly due to lifestyle choices, means missing out on a full day of peak-trading; consider whether bringing in a Sunday worker, to allow you to open your shop, could pay off. During the week, it might be possible to reduce opening hours during quieter periods, and if you have multiple locations, ask yourself if all of them are performing well. If one or two aren’t, would closing them ease the pressure?

Retail theft, driven by the cost-of-living crisis as well as opportunistic criminals, is a growing problem. Widening the aisles can provide a clearer view around a store so retailers can keep an eye on who is genuinely browsing versus who might be preparing to shoplift, while placing high-value items towards the back of the store can help deter those who would grab-and-run near the front. Security tags and CCTV cameras, while requiring a larger initial outlay, can make it harder for thieves to take goods and easier to catch them. Transparency is important, so maintain robust records on what you should have on your shelves and in your stockroom. If it doesn’t match up with the reality, investigate what could be happening.

• Make pricing work for you

Margins are decreasing, so experiment with price elasticity. Rounding up volume drivers such as pocket money toys by even 1p can generate thousands of extra pounds over time, without putting consumers off. Psychologically, consumers have become conditioned to think of a £4.99 product as a £5 product - so why not make it a £5 product? Push prices too far, however, and sales will fall, so the trick is to find the sweet spot that works for your business. Offering price guarantees on carefully selected lines can increase consumer confidence and cement a sale; when consumers believe they’re getting a good deal, they’re much more likely to part with their money, and this can be the difference between securing a sale and losing it to a competitor.

• Mastering stock control

Retailers will sometimes buy too much stock because of a fear of missing out, which can lead to product sitting around unsold for far too long. Not only does this stock take up space on-shelf and in storage, but it represents tied-up cash that can’t be invested in the newest launches. If stock is ageing, get it sold off at a discount (or even at a loss, if needs be) and get the money back in your pocket. It’s not an admission of failure – it’s a recognition of better opportunities elsewhere. Sometimes, ruthlessness is key.

• Thinking like an accountant

Carry out an annual business appraisal on a day that’s memorable to you, during which you can compare the performance of your store/s year on year and ask yourself what’s working, what’s not, and what you can do about it. There are solutions to most problems, but the problems have to be identified before they can be tackled. Don’t bury your head in the sand; if you act today, you could save yourself some difficult decisions later down the line.