Mattel's commitment to the independents

ToyNews sat down to talk with Mattel?s UK boss David Allmark, sales director Dominic Geddes and Toymaster MD Roger Dyson about the firm?s ongoing commitment to the independent sector and the current state of the market?.
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So, what is it that Mattel gets out of the Toymaster show? How important is the independent sector to you?

David Allmark: “At the end of the day this channel of distribution is extremely important post-Woolies. It doesn’t need us to reiterate that the consumer votes with their feet, so consequently the channel has different needs in terms of how they want the proposition tailored to them.

“Coming out of last year, we were all having to work in a different environment as what was available in the way of credit to any retailer. We all had to have a lot more insight into how the business performs and be confident about the relationship going forward.

“Toymaster gives us a fantastic insight into the picture as a whole. By having that relationship and that insight it allows us to plan with more confidence.”

Dominic Geddes: “You can plan better with the independents because you know you can plan for 52 weeks of business.”

And what about Toymaster, Roger? What sort of position are you in post-Woolies? I hear business is picking for a lot of indies now?

Roger Dyson: “In the first instance I wasn’t sure about the impact of the Woolies closure. I’ve always been of the view that the supermarkets were almost working together to take Woolies out of the market. But whether that business would gravitate to us or elsewhere is another question.

“The first thing the indies have over everyone else is location. The vast majority of our members are in a town that had a Woolies and many were right next door to one.”

But how do they make the most of this opportunity which has fallen in their lap?

“What they have to ensure they do is retain those customers. The message is ‘you’re in the best location’, and secondly you need to look at what Woolies were good at and follow that. We focus on pocket money toys and are looking more closely at lower-priced toys. We’ll have a more offer-led fourth quarter. More heavily promoted. Which is something we didn’t do so much when Woolies were around because they were better at it.

“Woolies customers saw Woolies as a destination store so they didn’t come into us in many instances. So they’re seeing a lot of products that were not in Woolies and a lot of small to medium sized suppliers are suddenly confronting consumers with products they’ve not seen before.”

And how has this changing situation affected suppliers?

DA: “The larger manufacturers are still spending advertising money. But there has been some reassessment with regards to how those funds are spent. The first six months has seen an erosion in TVRs.

“We’ve spent less than last year on TV, but we have found different ways of marketing brands. The industry has changed and I think that next year we will have a much more robust business because of that.

“Many of us feel very optimistic about the second half of the year and we’ve got evidence with the performance of the indies that there are great opportunities to be had.

Were you able to anticipate much of what has happened in any way?

DA: “We had a lot of visibility as to what was going on and I’m not saying we got everything right, but we could see a fair amount of disruption. But for us it would have been nice to do more business in the first half. But we are where we wanted to be.

“The year is panning out in a macro sense pretty much as we felt it would. The winners list is slightly different, but at the end of the day it does lay some good foundations.

DG: “We’ve always had a multi-channel strategy. We’ve not just suddenly become indie supporters. We have more field sales staff than any other supplier.”

And where does it leave Mattel in terms of its own projections for the year?

“We’re pretty much in line with our expectations for 2010. For next year with the product acquisitions we have lined up, we see big growth in the Mattel business. We’re looking very strong as an organisation.

“Core brands are the focus for this year. We’ve had extremely good growth on Fisher Price, Hot Wheels and Barbie.

Which, ultimately, is good news for all toy retailers, isn’t it?

RD: “When Mattel has a good time of it, we have a good time with Mattel. They are our number one supplier and our best trading partner.

“The only spanner in the works was not to do with Mattel, it was far more to do with Euler Hermes, whose influence was dramatic. We had a £2.7m credit limit with Mattel through Euler and when they pull the rug it has an effect.

“We’ve had a stuttering start and we’re all learning to live in a different world. What we’ve all learned is that credit insurance doesn’t work if you will only insure when there’s no risk.

“I think if you spoke to everyone at Toymaster and Mattel, they would agree that the problems are now behind us. We both understood the other party’s point of view when we talked.

And how has this show been for Mattel so far?

DG: “We’ve written more orders here than in the last few years.”

RD : “It also needs to be said that as we sit here in May, the market is 14 per cent down and we’re around 20 per cent up.

“Our members, on our advice, started the year very cautiously. Although Woolies had closed it didn’t mean we were piling in with inventory. We as a group weren’t prepared and re-stocked on January 1st to pick up the Woolies business.”

DA: “Easter happened in a big way. And proved we have an industry that does do well despite economic challenges.”

So, there’s still a lot to play for?

RD: “A lot of it is down to the indies to grasp. The biggest positive going forward is the recession is not going to last forever.

“There’s a lot less retail out there than there was 12 months ago. I used to think the toy business was just the toy business but now we’re in the entertainment busness.

“The competition is fierce but the difference will be the opportunities it presents. This is a product-lead business and no-one has the best products all the time.”


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