Since bursting onto the scene in 2016, Magformers has built a strong business in the construction category
and galvanised the magnetic toy sector with its award-winning products. ToyNews catches up with
Magformers UK managing director, David Kelly, to see what’s in the pipeline for the growing company
Five years ago, you’d have been pretty hard pressed to find a dominant name within a magnetic construction toy space that had, for some time previously, been subject to a period of languid sales and docile interest. In 2016, however, something happened to the market that shook it up with an injection of the enthusiasm that it not only needed, but very much deserved.
That something was Magformers, and it’s thanks to the South Korea-based but internationally reaching brand that the magnetic construction toy space is once again electric with activity and innovation. Not only has the firm invigorated a STEM toy market, but given first hand proof that the construction toys market isn’t all about clickable bricks.
But even a brand name as successful and synonymous with the sector as Magformers has become these past four years isn’t immune to the impacts of the global pandemic, having, like many, had to showcase its agility and adaptability throughout a year of uncertainty.
We catch up with Magformers UK’s managing director, David Kelly, to learn more about its plans for the coming year, how Covid-19 has influenced its own innovation, and how even the smallest changes can lead to big rewards.
Hello David, thank you for talking with us this month. Can we kick things off with an overview of what Magformers is bringing to the STEM and construction toy space in general?
As a brand, Magformers consistently offers high-quality toys that deliver a blend of fun, creativity, and educational value. All sets always have those qualities, but the proportions change depending on the individual set design – however, there is a STEM aspect to each one, with a strong emphasis on maths.
Since we launched in the UK in 2016, I believe we have completely re-invigorated the magnetic construction category, which had all but disappeared at retail. We have proved that there are successful alternatives to construction toys which are model-led, where children build the model on the box then never make it again. Parents in particular notice the frequency of repeat play with Magformers and this underpins the value of the toy.
It’s quite humbling to think of the many ways in which things have changed over the past year and a half. How has business been for you guys over the course of the pandemic?
It has been an exceedingly difficult and drawn out 12 months for sure. Our first priorities were, of course, that all of our staff, families and friends remained safe and well while we ensured that our business continued to operate. Many retail partners were closed and general sales, although robust, were about level compared to the previous year. In fact, 2020 was our best ever year in terms of profitability.
It is a constant battle trying to increase gross profit margin while cutting expenditure out of the business and trying to maintain sales, but I have been delighted with the way we’ve embraced those changes and quickly adapted to the shifting retail landscape.
We were one of the first companies to produce free lesson plans and worksheets for consumers and retailers back in March last year to aid home-schooling and we did see a surge in sales from our online partners. Now I am thrilled to see non-essential retailers opening their doors once again and look forward to a busy second half of the year.
How has Magformers UK adapted to the pandemic and the consumer and retail trends that have emerged from this period?
Thankfully, we were in a strong position to adapt. I had already moved into our own managed warehouses with a dedicated in-house team, so I wasn’t affected by third-party costs or operational impacts there.
Most of my staff were already working remotely to some degree, so we were geared up to handle that aspect of business. Many staff were furloughed and we are thankful for the furlough initiatives of the government. However, when staff are not actively working in the business it does have an impact on both sales and operational efficiencies – it really tests you.
Overall though, business was mixed. Our larger partners with strong web platforms performed incredibly, but we did lose business with some of our smaller, niche partners who rely more on local shopping habits. Overall, it levelled itself out in terms of sales.
“Our future builders, engineers, architects, scientists and mathematicians will all be inspired by the toys they play with as young children.”
Right, David. Onto the big question. What is Magformers bringing to the construction toy space for 2021? What key launches have you got for us this year?
The R&D for 2021’s portfolio was pretty much completed before the pandemic. We went to our global head office in South Korea in late 2019 and our brief for new products for the UK market was to develop sets with increased play value, larger numbers of pieces and lower SRPs.
That is a challenge when using expensive components like we do, but the team has done a good job. Our new Magformers Cube House 20-piece sets feature little characters with swappable clothes and there’s a new Carnival Plus Set and WOW Plus Set, marking improvements to two of our global best-sellers.
Last year we launched Stick-O, which is primarily aimed at children aged 18 months and upwards, and is very much focussed on smaller children learning through play still using our rotating magnet system. The pieces are larger, chunkier and are competitively priced and we hope to see new sets later this year.
My vision is to bring more ranges into our portfolio to reach even more retailers. This year will see us distribute a new creative puzzle collection called Puzzly-Do! I wanted to launch a new range that offers high retailer margins, low SSP’s, creative on-trend designs and is environmentally friendly, while maintaining our core values of being fun and educational.
We’ve done a cracking job and can’t wait to see Puzzly-Do! out in the marketplace.
To what extent has your portfolio been influenced or shaped by the trends to have emerged from the pandemic?
This year we have been delighted to introduce the Dothams UVC Steriliser Storage Box, which has been developed by our parent company Gymworld Inc and is lab-tested to kill Covid-19, salmonella, e-coli and 99.9 per cent of bugs.
The spotlight that the pandemic has shone on germ transmission makes the Dothams steriliser box essential in the home, workplace, nurseries, schools and leisure facilities.
Our Magformers and Stick-O products were used extensively during lockdowns to help with home learning/schooling, especially around the KS1/KS2 maths curriculum. And this has shifted even more focus on developing more educational resources around all our ranges.
Can we talk about the growth of the Magformers brand over the past few years? What has been behind the success of the brand, and how will you guys maintain this success for the coming years?
Magformers expanded rapidly from when I took over in late 2015 and saw huge growth as we established the brand. In that time, we found out which sets really drive sales, so we must try to build on that.
In previous years we have had a huge influx of new product development. But the downside was that a lot of those sets were a premium retail price, so not applicable to many UK outlets.
In South Korea, where our parent company is based, larger and more expensive sets sell phenomenally well, but the UK market is very different.
Overall, the key has been to identify the sets that work best in the UK and bring something new to those products, or develop similar lines without departing too far from the core Magformers values that work for both consumers and retailers. We have developed some new in-store branding with large scale department stores and we are exploring some exclusive sets for the UK.
“Just think, the first person to walk on Mars could have played with a Magformers set as a child! That would be something! There lies the vision: to be part of something much, much bigger than us.”
So what does that look like in terms of expansion? How will Magformers continue to grow and expand? How will this position you in the STEM/ construction toy category?
It’s always a challenge trying to expand in the construction category where a certain Danish company (sorry, I forget the name!) dominates the aisles. For us, just creating another five to 10 strong SKUs and developing more into educational channels could easily double our turnover.
We try and be as flexible and proactive as possible. We are small, but we certainly carry a punch! One retailer has sold over 30,000 units of Magformers across just four SKUs so that shows we certainly have a following.
The way Magformers and Stick-O pieces connect through our Rotating Magnet System – and therefore the creativity and versatility that the toys bring over conventional brick, block and stacking construction toys – mean we offer something unique and different.
That enabled us to grab a space in the construction/STEM category and now the challenge is to keep growing our market share.
Can we explore the Magformers ethos and approach towards innovation in the toy space? What core messages does Magformers maintain within its product development, and how will you continue to innovate in the space?
Ultimately, we are an educational product disguised as a toy. Across Asia, Magformers are used in schools and play centres to encourage 3D Brain Training, especially in maths. In some countries we are actually part of the school curriculum. So all product development always considers educational value and play value.
We were accredited by the influential Stem.org organisation over two years ago, recognising how innovative and STEM-focused our toys are. Recently, we have tried to introduce more play-value within certain sets by introducing characters and themes, which will be exciting to see develop.
However, across the board our success is certainly down to the incredible quality and design of every Magformers product and ensuring children’s safety. We simply will not compromise on that, meaning we cannot create ‘cheap’ Magformers products. We are immensely proud of our 100 per cent safety record and this will always be at the forefront of product development.
Looking at consumer trends; sustainability and a rediscovery of the value of play are core among consumers today. What is Magformers doing to promote these aspects?
We have always been advocates of learning through fun and play. To create a product that a child simply thinks is a ‘cool toy’ – while at the same time the parent sees their child learning about nets, geometry, shape recognition etc – is a great asset.
With Magformers you can build a simple cube in a couple of seconds with just six of our squares or understand Pythagoras’ Theorem in about three minutes with 50 of them! That is pretty cool. Magformers and Stick-O are both made to the highest standards using the best possible materials – it’s why we are a premium-priced toy. A set can be bought and used for years and years at a time without losing any of its original characteristics, reducing damage and ultimately, landfill.
We have removed a lot of unnecessary packaging. And we continue to explore alternatives for the plastics we use in manufacturing our toys – but that is trickier because of our quality and safety considerations.
In which direction will you be pushing Magformers for 2021 and beyond? How will you secure the brand’s position as a sector leader for the future?
We can never be complacent and never be satisfied. I often ask: “If we never produce another new product, then what can we do to still ensure growth?” By asking these questions we can really delve deep into understanding what we need to do to try and keep innovating and ensuring the brand has a future.
It always comes back to product and we are lucky that we do have genuinely great products and even small changes and developments can reap great rewards.
What do you think the future holds for the construction and STEM toy sector, and how will you guys be leading that?
Well, there will always be a future as construction and STEM is effectively traced back to early civilisations, so a life without it would mean no future! Our future builders, engineers, architects, scientists and mathematicians will all be inspired by the toys they play with as young children.
Igniting that curiosity and that passion and playing a small part in their development is a wonderful honour for the STEM sector.
Just think, the first person to walk on Mars could have played with a Magformers set as a child! That would be something! There lies the vision: to be part of something much, much bigger than us – and to ensure when our products have been purchased that every customer is a happy one, of course