Are we ready for some good news? Well, let me try to find a few positives to focus on from this week’s developments in the toy trade and beyond. First up, the hopelessly inept government of the past six weeks seems to have been replaced by a calmer version, with the pound and financial markets recovering slightly as a result. Consumers may not have been fully aware of the potential effect on store prices if the pound had not rebounded quickly, but suppliers and retailers certainly were – and I am sure a collective sigh of relief has accompanied sterling’s rally. We are not out of the woods just yet, but the portents are a lot better than they were two weeks ago. Maybe we just need a period where safe, boring people are in charge for a while?
Even better news comes from the toy retail front line, where I gather half term sales have shown encouraging signs of picking up…finally. It’s still sensible to remain pragmatic when looking at what may happen in the run-up to Christmas, but at least there is some evidence to suggest that toy sales are going in the right direction at last.
In other encouraging news, SMF Toytown opened its latest branch in Coventry yesterday – the 8000 sq ft branch is located on the first floor of a former Debenhams store, and the WhatsApp video which Alan Simpson sent me the day before the store opened showed how impactful it looked. Hopefully by the time I write this, the pristine shelves and aisles will have begun to look well-shopped, and the new Coventry store will be following the trajectory of Toytown’s new Perth store, which has traded exceptionally well since it opened a month ago.
It is the kind of location that I think many people in the toy community envisaged Toys R Us occupying when it starts its retail roll-out next year. Last week’s Blog had to be hastily rewritten on Friday morning, after news of the Toys R Us deal with WHSmith came into our inbox overnight. I wasn’t sure if my take on the arrangement would align with what other people were thinking – but most of the feedback I have received this week suggests I wasn’t too far away from capturing the general consensus.
If anything, some people were actually less optimistic about the partnership than I was, although one of Toys R Us’ big challenges was the lack of obvious choices: Sainsbury’s has Argos, Tesco has The Entertainer, Asda tried that approach and backtracked, and Morrisons is generally felt to be too inconsistent and not sufficiently focused on toys – while, crucially, the department store channel is in a huge state of flux here in the UK. Debenhams would have arguably been a logical option had it not closed its doors last year, especially when you look at the arrangement Toys R Us has put in place with Macy’s over in the US. John Lewis was one option I had thought plausible, but with only 34 stores left open in the UK, maybe the long-term numbers didn’t add up for both parties? Waitrose was another potential candidate I had identified, along with Wilko and The Range at the other end of the scale– although other people have suggested that maybe they would be considered too ‘downmarket’?