SMF ToyTown is calling on the world’s leading toy suppliers to reconsider the margins offered to the independent retail scene on the must have products of 2016.
The national toy retail outlet has labeled the current average margins made by indie toy shops of between 25 to 35 per cent as ‘unacceptable’, declaring that for those running a tight business such as itself, changes must be made in the “very near future.”
Having opened up four new stores across the UK and Ireland in the last year, with each one ‘performing incredibly well,’ for the family run business, SMF ToyTown enjoyed a ‘fantastic 2015.’
But despite the success, and amid what appears to be an upwards shift in High Street economy, ToyTown’s general manager, Brian Simpson, insists that in order for any retailer to prosper, the biggest changes need to come from the industry’s suppliers.
“Overall margin is something I would like to see change in the very near future,” says Simpson.
“The current deals that are done for the larger retailers put businesses like mine under severe pressure and this is a ridiculous trend that has been increasing in the toy trade over the last number of years.
“I don’t want people to get out their violins for me as if I am hard done by. I speak for any business like my own when I mention margins because, to some extent, the supplier is funding the crazy deals that are out there.
“I have been mistakenly sent certain documents in the past so I know that large retailers have marketing or promotion pots they can tap into when required. This just can’t be overlooked anymore.
“Margin return from the larger suppliers sit somewhere between 25 and 35 per cent. Call me brash, but how can we treat this as acceptable when it costs me more than this to run a very tight business?”
Simpson insists that its brick and mortar offering will continue to be at the forefront of ToyTown’s 24 stores focus for 2016, with new store openings firmly in the pipeline.
However, with the margins made by independents, Simpson asks how feasible it is for the collective toy retail scene to expect to continue to make money, despite the exciting product line up for the year ahead.
“Everyone is talking about a product range to rejuvenate the boys’ market, and Star Wars and Yo-Kai-Watch really seem to be on the way to drive this, so that will be exciting,” Simpson explained.
“I also love that there are female super heroes coming into our market in the near future. I have a 10 month old daughter and am very happy to know that she will be able to take on evil crime lords (Daddy) in the coming years.
“But I struggle to sit and place orders with a smile on my face knowing that I need to make 40 per cent margin from my products to pay the bills and make a bit of money, while seeing costs and RRPs that deliver nowhere near this.
“I imagine that any supplier who reads this will just shrug their shoulders and move on with their lives, but something really does have to change in the very near future.
“One of the best parts of the toy industry is those independent retailers that serve their community with great care and expertise. This will not be available to consumers in the next few years if the playing field is not leveled to some degree, but at present there is a huge amount of work to be done to sort this out.”
“The battle for margins has to end sometime, preferably very soon.”