Jay Foreman, CEO of “Basic Fun!” provides us with his observations and keen insights on the “Los Angeles Toy Preview Marathon Month”
By: Jay Foreman
Well, it’s that time again! The LA preview marathon month+ is upon us. This time for fall 24′. The first week was Walmart week. Next week comes Target/Costco week, and finally, it’s the remaining retailers, including Amazon, international retailers, and foreign distributors. These are the weeks that Mattel traditionally hosts the buying teams and senior management of their customers. The rest of what I call “the toy industry 20/80, “with the exception of the Big East powers, Hasbro and Lego, are in town and scramble to fill the gaps in the two, three, four, or so days the buying teams are out west each of the That includes Basic Fun and a few dozen others.
What I mean by 20/80 reflects the 20% of toy companies that provide 80% of the toys bought in the US. It also represents the 20% of retailers that sell 80% of the toys in the US. Our industry needs all our companies and retailers, large and small. No Kelly Toy, no Squismellows! Whether it’s a Big Box retailer, Learning Express store, or 5 Below, we need them all and see many.
But these weeks are about time management for the retailers. The big challenge here is that the buyers only have so much time each day to see vendors. On top of that, they have the second biggest city in America and miles of traffic-clogged roads to navigate to get around to appointments. A couple dozen local offices are scattered around the city, and a few buildings with out-of-town showrooms near Mattel’s HG in El Segundo. There is no convention center with 900 companies showing or a market center with 200 companies showing here in LA! That means there are only so many highly coveted meeting slots in a day. That’s not to mention what happens if a buyer is on maternity leave or, for any reason, can’t make it to LA. In that case, you have to find make-up time elsewhere. A lot is riding on each meeting and each week.
The good news is (so far), spirits are high for the first time in years. Sure, during the peaks of COVID-19, sales ended up being strong, but the uncertainty of it all and then the supply chain blowing up, inventory overload, and a slowdown by the consumer made the last three years one wild ride. I get the distinct feeling that we’ve turned a corner, and I sensed it from the tone of buyers the first week.
Inventory is back or getting back to traditional levels, and POS is trending up. Certainly, it won’t be hard to beat the numbers from the last four months of 2022. The question is, are retailers leaning into the last months of the year, or are they tip-toeing in? It’s likely a different story for each, but I’d bet retailers would rather be caught short and sell out than carry too much into 2024. That means those with products to back up late shortages might see some upside if they are willing to roll the dice on having “on hand” inventory locally in Q4. This goes for the US and Canada; as we know, things are more challenging around the rest of the world.
We all dodged a big bullet and another potential wobbler when the threatened UPS strike was settled last month. A strike by the nation’s largest parcel shipper would have greatly strained the last-mile supply chain. With inflation cooling, the supply chain open, and the consumer coming back to retail, we can see some light at the end of the tunnel this year. However, keep an eye on the canals this fall! The heatwaves around the world seem to be lowering levels in the Panama and Suez Canal, which is going to slow down traffic and possibly limit the size of boats passing through. Those giant boats might have problems making it through and could clog the lanes like the ship that turned sideways in the Suez Canal a couple of years ago.
While it’s only previews and early to make calls on 2024, I feel like 2024 offers our best chance in years to see some normalcy coming back in the market, which would be a welcome reprieve from years of tumult and turmoil. Next week, we’ve got the second round featuring Target and Costco, and in four weeks, the final week with the balance of the US retailers, international retailers, and international distributors. We go from two rounds with a small handful of meetings to a final week with at least 60 and as many as 90 meetings in the week! From there, it’s off to the “new” New York toy fair.
Buzz is building for NY, and with all but one or two major toy companies and over 900 other companies showing on the floor, the buyer commitments are lining up. It will be great to leave the overcoats and winter boots at home this year! I’m also hearing some folks actually talking about going to Hong Kong in January, but at this point, I’m sure only the most hardy will be in town. I’ll be there as always if anyone is coming to buy toys!
Good luck to the LA contingent, and see you all in NY in five weeks!
One post-script note for LA if you are going. You might think you are landing in a second or third-world country when you land at LAX these days! The airport is a mess. It will add 30 minutes to an hour to get an Uber or Taxi and an hour to two to get a rental car when you arrive. When you are ready to depart, it might take you 30 to 60 minutes to get to a terminal once you get into view of the airport. The governor assures me that they will have the work sorted out within a year, but the airport needs to be fixed. Tip: If you are taking a shuttle walk to the lower number terminals, the buses are often full by the time they get to 5-7. On the way home, take the shortcut to terminal 7 and walk to 6-4. The terminal is a disaster to traverse! Good luck in LA.