Notes from New York - ToyNews

Notes from New York

Toy Fair ? a time of exuberance and optimism for any manufacturer who is lucky enough to be there. The buyers from the large retailers arrive at the exhibit for their appointments sometimes even on time, and make notes, nodding approvingly at everything they see.
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At the end of the last day, every exhibitor is absolutely certain that they have aced the year and that fat POs will soon come gushing forth from exotic places like Bentonville, Wayne and and Minneapolis. However, unfortunately, these manufacturers do not know what the buyers in fact wrote down in their fat notebooks and that all these approving nods do not necessarily mean positive comments.

Two of my friends, buyers at large retailers, visited all the key exhibits [or the manufacturer’s office if the exhibitor did not attend toy fair – e.g. LeapFrog, Jakks and others]. They were kind enough to share their very copious notes and their conclusions with me and I will quote from these here. Please be aware that I synthesized their comments and also changed the language so as to make identification impossible.

As an overall statement, the two buyers were very focused on price points, more so than in other years. Vendors will find that pricing will be the most important aspect of any follow-up conversations and will be a very significant factor in any shelf space decision. Other than that, I am under the impression that they are not contemplating very major changes in terms of their vendor line-ups for this year, nor have they been confronted with major changes in the toy space allocation overall.

For reasons of space, I have restricted the comments to those applicable to publicly-quoted US companies.

Hasbro
"First presentation of Strawberry Shortcake and of CareBears.

“The action figure program is awesome. I liked in particular the new Transformers. Strawberry Shortcake is well done and appealing. Little Pony – not too sure. Games- a nice range but nothing spectacular. Preschool – Carebears look great, Sid the Science Kid could be very good but too early to tell. Furreal now much lower price points. Littlest Petshop looks a little tired.

"Overall, very strong in all areas except for electronics – Tiger hit the dust .Electronic intentions?"

Conclusion: "Will discuss endcap program for action figures and for Strawberry Shortcake. Consider CareBears separately, could be good for a combo. Nerf continues to be solid and should have continued programs."

Jakks Pacific

"Was not at ToyFair but had seen their line-up at the retailer buying offices already. Announced that they had acquired the Hello Kitty license from Sanrio [previously held by Bandai]. Target seems to be a launching pad for exclusive, new products and then expand to all other retailers. Have already lost the CareBears license and WWE is following next year.

"Nothing of major impact. New Neopets range looks interesting; could do well but too early to tell. Marbs also could have potential – low price points and good licenses. Hannah – somewhat questionable in the light of recent sales history.

"The absence of CareBears and WWE is noticeable and will likely call for a reduction of Jakks shelf space. Will have to see what they are going to do with Hello Kitty but is not likely to amount to too much this year."

Conclusion: "Neopets could well be a good endcap or aisle cap in second half."

LeapFrog

"This is a little disappointing. Tag Junior is just a younger version of the last year’s Tag system. The Scout range tries to prolong the very junior range created a few years ago. The rest is just books..Has the Fly technology been maxed out?

"Their new Blackberry should be tested. It apparently does extremely well in Europe. Good price point."

Conclusion: "Will need to refocus space."

Lego

"Got Mega’s Disney licenses from 2010 onwards.

"A very strong line-up and probably the strongest ever. With the switch from Mega to them, Lego has now all the major licenses except for Harry Potter. Trio could be a challenge but not likely this year. Starwars continues to do very well for us and there are some very nice new items. Creator, Power Miners, and Technic Series are strong entrants.

Conclusion: "The way this company is going, they should get some more prominent space – end caps and aisle caps."

Mattel

"Got Thomas license from Hit as of 2010. RC2 license in 2012? Also has Jakks’ WWE license from 2010 onwards.

"Barbie lineup could be stronger given the 50th anniversary. No major new initiatives - there is nothing 'wow' in the line-up. Trio could be a great new entry into the construction field. Their entertainment program is ok but not as strong as Hasbro’s offering – however, there is more to come, I am told.

"Blokus is great and should do well – endcap for Mattel Games? Fisher Price is solid but other than the Smart range and Elmo Hands nothing majorly new. Mind Flex could be good. Overall see emphasis on lower prices points – Elmo!

"Overall, solid but not inspired. Reserve view about action figure program. Review Smart range"

Conclusion: "Put Trio into construction aisle. Consider space for Mattel games – particularly Blokus. Ni Hao Kai-Lan could be a good fit for a combined [Mega, LeapFrog, FisherPrice] endcap. Smart range is very promising but needs further work."


Mega Brands

"With the loss of the Disney licenses, Mega’s licensing effort becomes second-rate.The acquisition of the Halo and Gabba Gabba licenses is not going to change this. However, Ni Hao Kai-Lan could lend itself for combos since LeapFrog and Mattel also are developing products for this license.

"Still the same reservations about Magnext. Streetz Range looks promising. Core Mega brands should continue to do well. Not too excited about the Halo license because of game’s M rating and the targeting of Tween age group."

Conclusion: "Will want to re-focus shelf space allocation and major on preschool and Streetz."

RC2

"RC2’s toy offering becomes a little more narrow every year. While they have some nice stuff for Thomas [Talking Railway series], the impending loss of the license will have its consequences on their future product development and hence restrict their lineup. The acquisition of SuperWhy is unlikely to change this materially. It also appears that the company spends more and more of their management time on non-toy related endeavors – First Years and the failed PI acquisition. However, they seem to have overcome their recall problems and there are no more major consumer complaints.

"Continues to be a solid player but has problems refreshing the various lines adequately."

Conclusion: "SuperWhy should be tested. There is no major change for all the other Learning Curve items. Lamaze is nice but price points make this now a difficult proposition."

When looking at these comments, it is important to remember that this is not the last word. The sales executives for these companies will be invited to make presentations and will have a hearing with their respective buyers. They will have an opportunity to correct any misunderstandings or to correct any shortcomings. Also, these buyers do not necessarily buy all these categories themselves and the buyers that do buy them may have their own opinions.

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