I was so sorry to hear that specialist retail chain Toy Galaxy has been forced to call in the administrators. I suspect this news will have caught quite a few suppliers off guard. There were numerous messages of support and sympathy for Bhav Patel and his team on our LinkedIn posts announcing the sad news, showing just how well-liked he was.
Nevertheless, sentiment aside, retail is undoubtedly an unforgiving place to operate at the moment. One minute you can be going along nicely, the next you are looking at your numbers and wondering what on earth happened. At this point, I would usually encourage suppliers to do their best to support the indies to help avoid this kind of situation getting out of hand, but suppliers have profitability challenges of their own at the moment. And to be fair, I thought that many of the promotional offers being showcased to indies at the Toymaster show seemed pretty generous, so I think that we are long past the time when toy suppliers sometimes took the indie channel for granted. Sadly, sometimes these things just happen.
As I understand it, the demise of Toy Galaxy wasn’t down to one specific factor, but a perfect storm of challenges which all came at once, the cumulative effect of which ultimately became too much to overcome. Business rates was unquestionably one of the key factors, and the British Retail Consortium has warned that rising inflation could lead to them increasing even further next year, rather than being cut, which many retailers – large and small – would love to see. Personally, I think it would be a mistake to push them even higher, and I do hope the government can find a way to stop that from happening. It would be even better if they could address the imbalance between rates paid by physical stores compared to the rates eCommerce businesses are paying for far larger premises.
Circana’s first half global sales data was released this week, and in general terms it was mildly encouraging – the toy trade is metaphorically drawing 1-1, which is a decent enough position to find ourselves in at half time. Across the G12 territories, toy sales declined marginally (-1%) from January to June 2024, while the average selling price was on par with last year at $11.57. I think most people would take that at this stage.
Building sets continues to be the main driver with +20% sales growth, followed by explorative and other toys (+5%) and plush and vehicles each growing by +1%. So basically, Lego has been the bright spot in an otherwise ‘ticking along’ first six months – retailers, does that sound about right to you? At least these numbers leave us all to play for in the second half of the year – better to be level than 3-0 down at half time.
Collaborations are increasingly becoming the name of the day in the toy market.
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