Hong Kong Toy & Games Fair Archives

Toy Jobs Hiring Surge Continues

Toy jobs hiring has continued to surge as companies continue to add people because “we just can’t get the work done.” The common refrain that I hear is that retailers continue to increase the number of hoops that a manufacturer must jump through in order to get their products placed. During The Great Recession, companies cut so many people that they no longer have enough hands on deck to push all the work through in a timely fashion. Search starts continue to be strong despite last month’s flat unemployment numbers. It will be interesting to see what Friday’s jobs report looks like

A week and a half ago, I returned from The Pinnacle Society’s Spring Conference. This is a group of seventy-five of the country’s top executive recruiters and they are truly “The Big Dogs of Recruiting.” As you might imagine, the years 2008-2011 were difficult ones for the recruiting business and approximately 40% of the recruiting firms that existed in 2007 are no longer with us. In speaking with fellow Pinnacle Society members in 2011, the mood was patchy with some recruiting specialties (notably IT, insurance and accounting) returning to a semblance of normalcy while others continue to flounder. At Toyjobs, 2011 saw great improvement over the depths of 2009 and 2010, but it was still nothing to write home about. Heading to 2012’s Spring Conference, I was feeling optimistic because since the end of Hong Kong Toy Show, toy industry hiring had been soaring. At the Conference, I soon learned that hiring was back close to normal across all industry specialties. Of course, these are the country’s top executive recruiters so their numbers are likely to be stronger than the economy’s as a whole, but I see this as a strong leading indicator of more good things to come in the US employment market. Let’s all hope it continues.

Cautiously breathing easier,
Tom Keoughan

P.S. What is it with these Wal-Mart Vice Chairmen? First, we had Tom Coughlin pocketing a cool half million in gift cards for his personal use and now The New York Times alleges that Vice Chairman Edward Castro Wright was involved in a regular program of bribing local officials to facilitate the granting of leases and building permits while he was running Wal-Mart de Mexico. To date, these allegations have not been proven and we should all remember that The New York Times has a record of being a little aggressive at grabbing headlines and a little lax in their fact checking (Does anyone remember Iraqi Weapons of Mass Destruction – not to mention yellowcake). That said, many of us are aware of the sometimes strange practices one has to engage in even here in the United States just to get a permit to add screens to a porch. As a Wal-Mart shareholder, I’m upset but have to admit that I consider this a much better use of company funds than nicking three 12 gauge shotguns, a few half gallons of vodka, a large polish sausage, and a lone Celine Dion CD and hailing them back to your private compound for what must have been some sort of unholy (or at least unwholesome) secret Ozark ritual. In any case, just don’t be caught trying to give a Wal-Mart buyer a soda.

By ToyJobs|2020-11-20T08:51:01-06:00May 2nd, 2012|ToyJobs Blog|Comments Off

Toy Jobs, 2012: More of the Same – Steady As She Goes

December hiring rose pushing the unemployment rate to its lowest level in nearly three years, suggesting that the US recovery is gaining traction. The economy added 200,000 jobs, double November’s pace and the unemployment rate fell from 8.7% to 8.5%. Although the trend is clearly positive, the hype over the December jobs report exceeds the reality. Job creation is still running at too low a rate to heal the woes of the US labor market and bring unemployment down to an acceptable level. About forty percent of the newly created jobs were temporary holiday season jobs in either retail or courier services and many of those jobs are disappearing as we speak. Also, the US remains vulnerable to setbacks if the European financial crisis deepens and spreads, or if surging oil prices crimp consumers and companies. That is not to say that things aren’t improving. They are, just not quite as quickly as the press or certain stripes of politicians are painting them.

On the positive side, Christmas retail sales appear to have been strong. The press has been harping that retail sales rose only 0.1% in December from November. However, holiday sales – defined as November and December’s retail sales excluding autos, gas and food service – rose about 5% from the year earlier level, to a record high. Many potential December sales were pulled forward into November prodded by retailers offering earlier discounts than usual. Many retailers’ profits took a hit reflecting slow traffic in mid-December followed by heavy discounting to clear inventories. They have created their own problem by training consumers to wait for the Big Sale. In doing so, they damage their margins and will ultimately try to improve them by beating up their suppliers. Suppliers will then beat up Asian factories (if there are any left) who will in turn squeeze paint resin and raw material suppliers. It’s a cycle almost perfectly designed to tamp down potential employment everywhere.

Reports back from The Hong Kong Toy and Games Fair are that it was a sparsely attended and relatively quiet show, although one with heavy international retail traffic. It may have been subdued by Chinese New Year falling earlier this year. I would have preferred more positive reports but at least the reports weren’t negative. Couple that with strong holiday sales and the slowly recovering US economy and I see things remaining status quo. Hiring will continue to improve at an increasing rate as it has since August 2011 but the recovery will be fragile and susceptible to financial woes potentially spreading from Europe, possible oil surges and trouble in the Middle East and general and rampant idiocy and electioneering coming out of all quarters of Washington D.C.

Muddling thru,
Tom Keoughan

By ToyJobs|2020-11-20T08:51:01-06:00January 25th, 2012|ToyJobs Blog|Comments Off

The Toyjobs Annual Review and Forecast 2011

Retail sales jumped out of the box quickly in November and overall holiday sales were strong despite a slowdown in late December. The International Council of Shopping Centers said that its index for November and December was up 4 per cent over last year, the most robust growth in the holiday shopping season since 2006. According to MasterCard SpendingPulse US retail sales, excluding automobiles, rose 5.5 per cent between November 5^th and December 24^th. Online sales grew 12 per cent to $32.6 billion, the highest total ever, according to tracking firm ComScore Inc.

While the big blizzard and rainstorms in California appeared to take a late month toll many retail analysts said the real culprit behind the weaker December sales was an avalanche of aggressive promotions in November. These deals pulled sales forward and raised unrealistic expectations about consumer spending for the rest of the year. In addition, promotional discounting was so deep that it affected retail profitability. Of course, we still don’t have the numbers for January gift card redemptions. Gift cards are particularly profitable because consumers tend to spend a bit more than the value of the card. Also 20-30 per cent of gift cards never get redeemed at all, making them the retail version of “printing money”.

So, in any case, after a fairly strong holiday sales season much of the toy industry sporting tender holiday heads, hopped on planes bound for the Hong Kong Toy and Games Fair. As I talk to senior toy executives what I am hearing is that US retailer attendance continues to grow lighter but international buyers have been upbeat. In the US, retailers overbought a little in 2010 and are now more cautious but not overly so. Manufacturers are pleased that Wal-Mart is expanding its toy aisle again, at least during the holiday shopping season.

The biggest discussion is about the continuing rise in production costs. China has a serious inflation problem and the authorities have been trying, mostly unsuccessfully, to repeatedly tap the brakes. Raw material costs are rising and the yuan is strengthening. Add to that a nearly 20 per cent hike in the Dongguan minimum wage and constant rumors that many workers will not return to southern factories after the Chinese New Year. Chinese authorities have been trying to push low-end labor intensive manufacturing to the north and west. Inexperienced factories and inexperienced workers will naturally lead to heightened quality problems. Add to this, that shipping back to the coast on overcrowded roads (such as they are) is bound to slow things down. Despite this I expect retailers to continue to confirm orders later and later leaving manufacturers with impossible to meet lead times. The big question is will they allow manufacturers to pass through rising costs by increasing their holy price points.

This is all, however, against a backdrop of an economy that is clearly gaining momentum. Private sector employers added 297,000 jobs in December. The gain over the November numbers was the largest in the reports 10 year history. Outplacement firm Challenger, Gray and Christmas, said that layoffs in 2010 were the lowest since 1997. The unemployment rate in December dropped from 9.8 per cent to 9.4 per cent and while some economists voiced disappointment, they seem to have forgotten that most companies operate on budgets. In late 2009, when 2010 budgets were being drawn up, many companies were still worried that the world was coming to an end. 2011 budgets put together in late 2010 seem to reflect that companies are “cautious but comfortable”. All eyes should be firmly focused on the January – April employment numbers.

Anecdotally, Toyjobs saw search starts pick up since late October. Companies were telling us “find people now that we can start in January when we have the budget”. Since January 3^rd we have seen a huge surge in search starts. This isn’t yet reflected on our job board because we tend to post searches toward the end of our work on them in order to keep LRWRB (Lonely Recruiters Without Repeat Business) at bay. I believe we will see this surge moderate as we move into the May/June time frame because it represents pent up demand just waiting for a flip of the calendar page to make budgets available. That said, I do think that hiring will continue to be much stronger than last year but it won’t be wholesale hiring. It will be companies filling necessary positions that were previously left open due to a mixture of fear and budgetary constraints.

On the road (or maybe “in the road”) leading to Toy Fair I have been flipping through the trade press and perusing new products. I regret to announce that Toyjobs has to once again present it’s much avoided “You’ve Gotta Be Kidding Me Award”

Wild Creations introduces Poo in a Box. Yes, really. This nutrient-rich animal dung comes from an elephant, reindeer, or rhinoceros. From the Natural History Museum, the Poo in a Box begins at a British zoo or safari park and is treated to be germ and odor free. Kids can sow the seeds, water the cardboard box, and watch the plants grow. Poo in a Box comes in three styles. Elephant poo with Christmas tree seeds, Reindeer poo with rose seed or Rhino poo with a banana tree seed.

Toyjobs predicts, that if this product sells well, the nation’s schoolyards will see a lot of tiny tears wearing pigtails in the coming year.

After the not so secret stealth fighter, the Gates trip to China and Hu Jintao’s visit to the United States; our China Report (and I’m sure you too) have been inundated with a flood of articles on China. In a not entirely successful attempt to stick a thumb in the dyke of this flood of information we have tried to focus on content that is: the most important stuff, more analysis than news reportage and is from unique sources that many of your may not regularly peruse.

Lastly, I would like to say, personally: Kudos for Neil Friedman. Mr. Friedman has been one of those rare combinations of savvy toy executive, a strong manager and an all around great guy who treated everyone he dealt with fairly and with respect. He’s fun too! I know that I join everyone in the toy industry in greedily hoping that Neil won’t be hanging up his cleats and will pop up somewhere else soon – hopefully leading a small to medium sized company where it can all be fun again.

I look forward to seeing everybody in February. There will surely be snow.

Tom Keoughan

P.S. For those in the know: Infomercial Dave – what’s he selling Snuggies or slapchoppers? Just a further revelation of his Huckster’s Heart.

By ToyJobs|2020-11-20T08:51:04-06:00January 25th, 2011|ToyJobs Blog|Comments Off

Toyjobs.com: Review and Forecast

Same store retail sales eventually rallied after a late December snow dump to rise about 3 percent. Of course, this was compared to the very weak year earlier period. It’s also difficult to discuss retail sales trends without including Wal-Mart, but Wal-Mart doesn’t report monthly sales data anymore. As a shareholder, I like that but as a chronicler it’s a pain in the neck. I would assume that in the current economic climate they did well but we should also keep in mind that their December ’08 numbers were better than most which will skew current comparisons downward.

During the past year retailers seemed to get it just about right. They navigated the tough economic terrain by discounting just a few items and offering other promotions but by keeping prices relatively steady for much of their inventory. Of course in the toy aisle, Wal-Mart did its usual October price slashing which was then followed by much of the retail community. NPD reports that overall US toy sales were down by 2 percent. Obviously that isn’t good but it is far from being catastrophic.

While the congress fiddled (yes, the Nero illusion is intended) with a healthcare plan that almost nobody wanted, the rest of the country focused on jobs. The economy began to grow in the second half of 2009 but the jobs market lagged behind with businesses still being reluctant to hire. Although the December headline (U3) unemployment number was unchanged at 10% from November, the broader measure of U6 – which includes those forced to work part time or discouraged from seeking work – rose from 17.2 to 17.3 percent.

Here at Toyjobs we had our worst year ever. The overall number of searches was way down and many of the searches that were started were canceled or put on interminable holds. Waxing philosophically, “Some days the fish are there and some days they are not but I’m out there fishing hard in either case”. Perhaps a quarter of all search firms went out of business last year but thanks to three decades of success Toyjobs is in strong financial shape and I will be out there fishing well into the future.

Recent discussions with toy execs returning from Hong Kong reveal that the mood at the Hong Kong Toy Show was mostly buoyant. Retailers were pretty clean on inventory and were looking to buy. That said, toy companies may want to temper their enthusiasm. Wal-Mart and Target are cutting back on toy space, SKUs, and vendors.

In Wal-Mart’s case, toys have never been all that profitable and have primarily been used to drive foot traffic during the fourth quarter. The “groceryization” of Wal-Mart has worked out so fantastically – with the average customer visiting the store once a week rather than once a month – that toys are no longer needed to drive traffic. Of course, they’ll keep their hand in and stock the obvious big company items backed by big advertising dollars, but they’re not going to think too hard about the toy business anymore – no more guessing at what will be a hot seller. They’re just going to focus on moving merchandise. Don’t expect them to take any chances. I’m not sure of the thinking behind Target’s strategy (no grocery to drive traffic), perhaps it’s just a case of me-tooism.

This trend will obviously benefit big toy companies who are able to make big TV advertising commitments. It also allows other retailers to create a larger toy footprint without having to compete with Wal-Mart’s crushing margins. Sears has been testing getting back into the business. Barnes and Noble and Borders, two retailers who generate a lot of traffic despite Amazon, are putting a greater emphasis on toys. I suspect that other retailers will follow suit now that they won’t have to compete with Wal-Mart’s pricing. Not initially, but over the longer pull, toy companies should be pleased with the ability to diversify their customer base and at higher margins.

The biggest beneficiary of the Wal-Mart/Target downsizing of the toy department should be Toys ‘R’ Us. People like to shop specialty stores because of their broader product offerings. Toys ‘R’ Us is also taking big steps to counteract their Achilles heel – the fact that they have traditionally been standalone – separate trip stores. During the past holiday shopping season they opened more than 80 pop-up stores in malls and shopping centers. The concept may have been quickly conceived and erratically executed but they should have it nailed by 2010 or 2011. Toys ‘R’ Us has also been working hard to turn itself into a destination by placing its Babies ‘R’ Us and Toys ‘R’ Us stores side by side. Babies ‘R’ Us can function similarly to Wal-Mart’s grocery business by bringing in customers for their weekly needs (diapers, wipes, etc.) and acting as a feeder for Toys ‘R’ Us. We should all hope that this strategy works as the toy industry surely needs a stronger Toys ‘R’ Us.

Here at Toyjobs, search starts jumped significantly in mid December as companies anticipated a new year with new budgets. It is still too soon to tell if this improvement will be sustainable throughout the year or if it is just a new budget bump. It is also too soon to tell if these search starts will turn into actual hires or be canceled or put on hold as so many were in 2009. I should have a much better handle on that by the time of our post New York Toy Fair issue. I can tell you that the air is different than it was even six months ago. It “smells” better. Certainly some companies are still having problems and most companies are still cautious but the palpable sense of fear is gone and has been replaced by a feeling of “we’re working through it”. My sense is that this will be a recovery year much like 2003. It won’t be a good year but it will be increasingly better than last. I just hope that we only have ONE recovery year rather than two or three.

Muddling thru,

Tom Keoughan

By ToyJobs|2020-11-20T08:51:04-06:00January 25th, 2010|ToyJobs Blog|Comments Off

Foot Traffic Increases But Spending Slows

Over the Black Friday weekend, massive human herds were out in force but retailers pacified them with electric fences, cattle prods and lots of large blue salt licks scattered about. It seems that even though foot traffic increased; the hordes were spending less on a per capita basis than even last year’s poor numbers. Is it possible that these creatures spend more when they have been whipped into a full frothing frenzy? Needless to say, I wasn’t to be found anywhere near any retail outlet for the entirety of the greedfest.

Weekend sales were balanced by a surge in both sales and traffic on Cyber Monday. Forrester Research projects that holiday season online shopping may grow from 6% to 10% of all holiday sales. Even with this growth, online sales are still too small to push the overall sales needle by much and a lot of the increase may simply be the result of cannibalization of bricks and mortar sales. This may portend a long term shift in consumer patterns more than it actually affects sales volumes today. Employers may be concerned that most of this online shopping takes place during office hours which echoes trends seen at Toyjobs where our analytics show that our job board is accessed mainly during weekdays and drops off significantly during evenings and weekends.

It’s important to remember that Thanksgiving is a notoriously poor predictor of sales for the holiday season as a whole. It is typically eclipsed by the last weekend before Christmas. This year there is concern that light retail inventories will mean that there won’t be many choice goods left on the shelves by that time. The most widely cited forecast for this year’s season calls for a 1% decline in holiday sales from last year’s already weak showing. Furthermore, a 2005 study shows that retail forecasters have a tendency to overestimate sales. All this leaves me with little solid footing in guessing (and that’s really what it is) where retail sales will end up. I think it’s pretty clear that it won’t be “good”. It just remains to be seen how “bad” they will turn out although I don’t think the end result will be disastrous. We’ll just have to wait and see.

Last Friday’s jobs data seem to indicate that we may be beginning to turn the corner on the employment front. Jobs lost in November were down to 11,000 (a drop in the bucket considering the size of the population) and the unemployment rate drifted lower from 10.2% to 10% (still incredibly bad). Significantly, U6 (a broader unemployment statistic which includes: the underemployed, part timers, “consultants” and the totally disheartened) has gone from 16.3% all the way down to 12.2%. While those numbers are an improvement, one month does not make a trend and economic indicators don’t usually travel in a straight line.

When you consider everyone affected by unemployment (spouses, kids, dependent elderly parents), the “percentage of the affected” is huge. Throw in that one in eight Americans is currently benefiting from some sort of food stamp program and it becomes quite clear that we are a very long way from being out of the woods.

Anecdotally, Toyjobs has found that things are continuing to improve. In fact, I would say that the improvement curve has steepened in just the last few weeks. A year ago, when we would call longstanding clients about possible job opportunities – they would just laugh. Currently there is a lot more chatter. This hasn’t shown up on our jobs board as of yet, but I predict that it will over the next six weeks. We have a lot of outstanding unsigned search contracts out there (these are contracts sent to clients at their request but not yet signed and the search not yet started). Also we are having a lot of discussions with companies getting ready to start searches but waiting to see how holiday sales and the January Hong Kong Toy and Games Fair pan out. What is less spoken of, and is probably the Joker in the deck, is how banks will deal with loans and lines of credit. Things seem to be slowly loosening up but I still have a hard time believing that seasonal fashion businesses are on the top of anybody’s lending list. I’m not yet ready to say that I’m cautiously optimistic. I am more comfortable with the phrase – optimistically cautious.

Happy (?) Holidays,

Tom Keoughan

By ToyJobs|2020-11-20T08:51:04-06:00December 8th, 2009|ToyJobs Blog|Comments Off

Fall Toy Preview: A Little Grumbling Despite The Full Dance Cards

My experience at the Dallas Fall Toy Preview was that the overall mood was “workmanlike”. While I can’t say that people were exactly upbeat, there wasn’t the pervasive sense of gloom that we’ve seen at the last few trade shows. Most people seemed to give off more of a sense of being survivors, of being beaten up but having made it through with the knowledge that the worst is over but that there are still some tough miles ahead.

In the weeks leading up to the show there was a lot of talk that Target and Wal-Mart (both extremely early price choppers this year) were not planning to attend. I hear that before every trade show and, as always, Target and Wal-Mart sent buyers although not their entire contingent. Even with that I still heard a lot of grumbling at the show despite the fact that most companies had very full dance cards. My sense is that those people and companies who were disappointed were so because they had a false set of expectations. If you go into Dallas thinking that you are going to write a Target order, I can guarantee you that you will be disappointed. This is a great show for getting retailer feedback about your offerings, giving you a chance to tweak product, packaging and assortments prior to the all important Hong Kong Toy and Gamers Fair in January. It’s also a great time to focus and have some quality meetings with second and third tier retailers. As one VP Sales said to me “even if Wal-Mart and Target weren’t here at all, I have the opportunity to meet with fifty customers in just three days. Where else would I want to be?”

With Wal-Mart de-emphasizing the toy aisle those second and third tier retailers are becoming more important. By stepping back, Wal-Mart has allowed other retailers to see opportunity in the toy business and many of them are responding aggressively. Toys ‘R’ Us is stepping into the malls with eighty pop-up stores. This will be their first year of doing this so their execution is a question mark but let’s face it, anything has got to be an improvement over the mess that was the KB Toys retail experience. Sears is testing getting back into the toy business and, if successful, will make a bigger commitment for 2010. Barnes and Noble and Borders, two retailers that definitely still get traffic, are putting a greater emphasis on toys and providing a lot more shelf space. I suspect that other retailers will follow suit now that they won’t have to compete with Wal-Mart pricing on as many products. Toy companies should be happy with the increased shelf space, diversification of customers, and the likely higher margins to be had from these retailers.

What toy companies should be complaining about is the lack of trade show support from toy behemoths Mattel, Hasbro and Lego. This lack of support has now spread to second tier players such as Jakks Pacific, Spinmaster and MGA. Certainly this makes business sense for larger companies as they know they will get their face time with the retailers. Obviously, they would prefer that buyers be totally focused on their product line rather than “distracted” by a hundred smaller competitors. Alright, I get it, but the toy industry may want to consider whether they want these large companies dominating the TIA board. Certainly, the TIA needs their dues but one of TIA’s main functions is to organize trade shows and industry events. In choosing not to support trade shows, these companies’ dominant place on the TIA board is a clear conflict of interest. One of a trade organization’s most important missions is to promote and protect the interests of it’s smaller and medium sized members. The big boys have the ability to fend for themselves.

In our isn’t that ironic file: Mattel has reached a settlement in twenty-two class action suits over their widespread product recalls in 2007. The recalls resulted in over-regulation which disproportionally affects small and medium size toymakers. While Mattel can amortize testing costs and manpower over a gazillion products sold; the smaller companies are hit much harder by testing costs, time to market and eyestrain (from having to wade through all those crazy new regs). Creativity has also been blunted because small companies can no longer produce a new and innovative product and take a flyer to see how it sells in the marketplace. The new rules mean that a company needs pretty large presells to be sure that a product will at least break even. Now do I think that Mattel intended this from the beginning? Of course not, but the fact remains that Mattel is one of the biggest beneficiaries of their own quality and product safety failures. If the court approves this settlement – it looks to me like they got off cheap.

Toy industry hiring continues to slowly improve. It’s certainly not good but it’s better than it was six or even three months ago. My continuing forecast is that hiring will continue to be weak at least until the August/September (and it may take longer) time frame. For most of 2010 hiring will be slow although not as bad as 2009. Some very important meetings are coming up in December and January. Those meetings are not with retailers and not in Hong Kong but with banks. Banks slashed loans and lines of credit in 2009. With banks still reluctant to lend, regardless of Holiday sales numbers, I can’t imagine that seasonal fashion businesses will be at the top of their lending lists.

Muddling thru,

Tom Keoughan

By ToyJobs|2009-10-30T10:47:22-05:00October 30th, 2009|ToyJobs Blog|Comments Off

Toy Industry: Bleak Forecast 2009

In 2008 the toy industry and indeed everybody had to endure the worst holiday sales season since 1992. This was truly an awful year where both comparative sales and total sales were down sharply for most retailers. In some recent years we have seen weak comparative store data even though total sales were fairly strong. I’ve always argued that comp store sales is a flawed indicator because it fails to take into account the cannibalization of sales that occurs as large retailers continue to build more and more stores closer and closer together. Think Wal-Mart or Starbucks. In 2009, we may see a “reverse cannibalization effect” as retail chains shut down large numbers of stores and entire chains go out of business. It’s my feeling that total store sales is an obviously better measure of how much total “stuff” is sold by a retailer to consumers. In any case, 2008 was a horrible year for retail when measured by either yardstick. Only the deep discounters like Wal-Mart, drug chains and the dollar stores had good or even decent years. Surprisingly, even the warehouse clubs did poorly.

The combination of a terrible holiday sales season and the credit crunch economy proved too much for several weaker retailers who were forced into Chapter 11 or even liquidation. KB Toys, Circuit City, Linen & Things, Office Depot and Gottschalks all went under. The retail death watch continues with Dillards, Claire’s, Duane Reade, Talbots, Bon-Ton Stores, Pier One Imports and even Borders all rumored to be teetering close to bankruptcy. In addition to outright failures many retailers will close a significant number of stores. It is estimated that 200,000 stores will close by year end. Fewer stores means less shelf space to fill which translates to less overall sales for toy companies. As always there will be winners and losers.

Most companies are not self financing and rely on bank loans or lines of credit to finance operations. In the current financial climate where banks reticent about lending even to the strong, I would expect weak and marginal companies to struggle. Starting this past September we began to see toy companies either fail or be bought out by stronger rivals. I would look for the trend of acquisitions and company closings to continue and even accelerate.

With the news that several key retailers were not going to attend the January Hong Kong Toy and Gamers Fair, toy executives spent the month of December scrambling to get the 2009 sales season rolling with those major retailers that weren’t going to attend. Once in Hong Kong, some complained about the retailers who weren’t in attendance and some even said that the show was a waste of time. Other, more optimistic types saw it as an opportunity to really focus on second and third tier customers. It was also noted that the international retail presence was particularly strong.

I was both curious and concerned that with oil, resin and transportation prices coming down that retailers might try to claw back the already less than adequate price increases they allowed toy companies in 2008. The word back from Hong Kong was “they asked but they didn’t demand.” Toy companies were able to cite high safety testing costs as a reason why prices shouldn’t be rolled back. Also discussed, was that with so many Chinese toy factories closing (more coming after Chinese New Year?) that U.S. toy companies had little negotiating leverage left with those factories that remained. Price stability will be crucial in 2009 as both lower sales volumes AND tighter margins would be a recipe for disaster. That said, my best guess is that 2009 will be the toy industry’s most difficult year since I started out in 1981.

Toyjobs had a respectable year in 2008. After getting off to our fastest first half ever, we entered the third quarter and unfortunately, there pretty much wasn’t a third quarter. We were lucky that we had, what for us was, an average fourth quarter. That said more than half our fourth quarter placements came from a single client who was hiring due to a corporate relocation. Overall we were about 15% off of our average for the year. That’s not bad because our average is pretty good. I’m happy with our results in 2008 but I am even more happy that the year is over. The only thing that I’m not happy about is the outlook for 2009. I foresee that by the end of the year there will be fewer retailers, fewer toy factories, fewer US toy companies and yes, fewer toy recruiters. I hope that when it’s all over everybody reading this will still be standing. We, here at Toyjobs, certainly intend to be.

See y’all in New York,

Tom Keoughan

By ToyJobs|2020-11-20T08:51:04-06:00January 27th, 2009|ToyJobs Blog|Comments Off