jobs in the toy industry

Fall Toy Preview: A Success…But

I always dread the Javits Center:  home of “the world’s hardest floors,” so with all of the Fall Toy Preview pre-show negativity, I started out expecting the worst–but that’s not the way it turned out.  When I arrived on Friday, everyone seemed to be having a good time.  I don’t know if it was good for business or not, but the open forum led to a clubby old home week feel with a lot of backslapping and storytelling including more than a few amusing but outrageous lies.  It was sort of like a cocktail party without the drinks; which surely came later.  That was Friday and it was a lot of fun, but by Sunday…and Monday…the whole thing was wearing a bit thin.

About half of the companies I spoke with said that the show was an incredible waste of time and money.  The other half thought that the show was great.  I’m not sure what the “differentiator” was, but maybe it was that some companies came in with the proper expectations and knew how to work that kind of show.  Those companies with open booths did get significant walk-up trade (I asked) while those who had completely closed booths did not.  I saw more than one buyer circling those ugly white walls trying to find an entrance.  Hopefully, they didn’t just give up.  With knockoff anxieties running high in this age of cell phone cameras, a hybrid booth seemed to work out the best.  A good example was Radica which had a small open section with their well known and well liked Sr. VP of Sales standing out front attracting buyers, industry notables and others (like me) thereby generating a small crowd and a bit of a buzz and then funneling the buyers “inside” to meet with his sales troops.  Before the show, all I heard was that none of the major retailers were coming, but I saw some pretty good looking dance cards.  Walmart, Target, Toys ‘R’ Us, Meijers, Borders, Walgreen, etc.  Hey, that’s not bad business.

Toy companies who located away from the Javits Center fared less well.  The toy building was a dark, dismal, dusty, empty and echoey affair and the seven or eight companies showing there should thank Playalong for drawing buyers to the building.  From companies located in hotel rooms and other locations, I mostly heard tales of late appointments, missed appointments and a lot of time spent standing around bored.  Each company can decide for themselves if it makes sense to attend the show, but the moral of the story is “if you’re going to be there…be there!”

It was a great show for me with the open atmosphere and a lot of senior toy executives standing around without a whole helluva lot to do much of the time.  I figured that all of the curtains and doors were meant to keep me away from their Brand Managers.  Fortunately for me, that didn’t really work all that well.  So while I had a great show, I somehow suspect that the industry as a whole shouldn’t base its decisions on making me happy.

Mostly what I heard is that although this show worked out much better than expected, the Javits Center is difficult to deal with, expensive to deal with and at the end of the day if you exhibit at two shows, no cheaper than maintaining a showroom year round.  The consensus was that the TIA should commit to keeping both tradeshows in New York and should commit to the Javits Center for three or four years thereby giving the industry time to find a sound and properly priced building or group of spaces in adjacent buildings.  In Manhattan, space does become available and it makes a lot of sense to wait, watch, evaluate and then pounce on a sound, viable option rather than trying to force a bad decision down everyone’s throats due to artificially created time constraints.

The ability of the toy industry to get together and “pounce” is sure to give rise to more than a few derisive chuckles and worse (please include me as a chucklehead).  What the industry needs is leadership, and not from Mattel or Hasbro.  It is not in Mattel or Hasbro’s best interest to be part of a toy center.  Buyers are going to come and see them wherever they are and Mattel and Hasbro want to dominate those buyers’ attention and time.  Leadership needs to come from the second tier companies:  Jakks, Spinmaster, Megabloks, etc.  If they can come to a decision and commit, then all the small and medium sized companies can feel comfortable about making what would be a very productive decision to follow.

The Toy Industry…pouncing…yeah it’s pretty funny stuff.

All the best,

Tom Keoughan

By | November 15th, 2006|ToyJobs Blog|Comments Off on Fall Toy Preview: A Success…But

Running Harder to Stay in Place

While the rest of the world has spent the summer focused on Lebanon, bomb plots, heat waves and Mel Gibson, toy industry hiring has continued at a rapid pace.  After the expected summer slowdown, Toyjobs is currently tracking to have its second best year out of twenty-five.  This is not because 2006 seems to be such an extraordinary year for the toy business, although “Pirates” is doing extremely well and “Dora” continues to be strong.  The year seems best characterized by “running harder to stay in place.”  The best explanation I can give is:  retailers are demanding more and more specials, custom jobs and private label products; they continue to put off actually committing to those demands until the last possible second; as such companies need more capable pairs of hands just to get the work done.  Another big reason for heightened hiring is that in difficult times it’s always easy to blame and change your sales team whether it’s their fault or not. 

With Mattel’s purchase of Radica, one w`onders what will become of Radica’s Texas offices and staff.  I’m sure that Mattel is telling everyone that they are part of some big future plan and that their jobs are secure but that is standard practice for a purchasing company whether it is true or not.  My take is that Mattel is mainly interested in acquiring Radica’s ability to develop technology or the electronic guts of things.  That part of Radica’s product development is based in Asia.  What happens to Texas over the next two years remains to be seen.  Another big rumor that is bouncing around these days is that Mattel is looking to acquire Leapfrog.  Certainly at its current stock price, Leapfrog is a lot cheaper than it used to be.  The purchase would also give Mattel a lot of additional space on retailers’ shelves.  It is important to keep in mind that while the Leapfrog Class A shares are publicly traded, the Class B supervoting shares continue to be owned by Knowledge Universe and its affiliates who also control the Board.  It’s unlikely that they would be willing to let the Company go at anywhere near the current price.   

Kudos to Ted Kieswetter for a very successful career and a successful exit strategy.  For over thirty years, he has built International Playthings into the strongest company in the specialty toy business.  He has always carried himself honorably and with both a sense of humor and a touch of class.  He has been a great ambassador both for International Playthings and the specialty toy business as a whole.  He will be greatly missed. 

I also feel compelled to mention a disservice done to another longtime toy industry standout.  In early August, Action Products issued a press release stating that Larry Bernstein (Big Larry) had been ousted as President and that Chairman Ron Kaplan would be stepping in to run daily operations.  The release stated that the reason for Bernstein’s ouster was that sales were down from $3.8 million to $3.2 million during the first half.  Just to illuminate things, Larry Bernstein only started at the company in November of 2005.  Any of the products that weren’t selling in early 2006 were developed before he got there and under Kaplan’s stewardship.  If sales suddenly take off in 2007, I don’t suppose that Mr. Bernstein will get credit for the products developed during his watch.  Action Products has blown through numerous short term Presidents (Ron Tuchman comes to mind) since Ron Kaplan took over from his parents.  I guess my point is:  It’s your company and you can do what you want, but you shouldn’t go taking potshots at a guy who parachuted in to try to save your bacon, when it is likely that it is you yourself who is the problem.  You may be able to fool yourself but people who know the toy business…know better.  Before I get off my soapbox; I’d like to add that I fully expect that my brief outburst will result in yet another self serving Action Products press release.

The sad saga of former Walmart Vice Chairman Tom Coughlin has finally (hopefully) come to a close.  Late last week, the judge sentenced him to twenty-seven months which can be served in home confinement due to poor health.  The Wall Street Journal reported that Coughlin, who was all tearful apologies in the court room, changed his tune as soon as he got outside and again claimed that he had been reimbursing himself for a clandestine scheme to fund anti-union activities.  I am sure that the judge was not pleased with his performance.  While I would have little trouble believing that Walmart has fought the unionization of its stores covertly as it has done openly, if Mr. Coughlin wishes to try to regain his reputation he will need to provide documentation.  Without that I have to believe that it’s just a load of hooey.  Of course, a little problem he has is that providing such documentation could easily lead to federal criminal charges for violating labor laws and racketeering.  Hopefully, Mr. Coughlin has more than just that one Celine Dion CD to listen to and that one jug of vodka to drink during his two plus years of home confinement.  If he runs low on provisions, he can always send someone down to the local…Walmart.  He had better bring cash though; I don’t think they’re going to be accepting any gift cards. 

Finally, on to more important matters.  So, is the Eleventh Avenue Toy Center going to work out?  It’s up to you readers to decide.  One common complaint is that it’s in a pretty bad area but I think you have to move past that.  Their aren’t a lot of great choices available.  Not many great choices are likely to become available.  I know you don’t want to pay the price per square foot that a great choice, even if it were available, would entail.  On the location’s positive side:  it is pretty close to the Javits Center and there is plenty of parking nearby at the Intrepid Aircraft Carrier. 

A much bigger problem is that there has been a degree of bungling in what is being offered.  When a company would request 1,000 square feet of space it would get 600 square feet of usable space plus 400 square feet of hallways and common area to pay for.  This effectively drove the price per square foot from $40 to approximately $70 AND you didn’t have all the showroom space you needed.  Every building has common space that needs to be paid for but from what I understand; 200 5th Avenue was more like 25%.  Bumping it up to 40% is a big bite.  Those better be really nice “luxury” hallways.  At the very least, communication could have been handled better so that both renters and rentees were talking the same language about what their space requirements were.  I don’t know if the value proposition works out for you or not.  I don’t need any space and as such don’t have any skin in the game.  I think it is important that the toy business has a home and is able to come together in one building.  If the numbers work for you, then it’s time to get moving.  Spinmaster and Mega Bloks/Rose Art have signed on and as fairly large players, can provide an anchor for the building.  So get your calculators calculating and your bean counters bean counting because time is of the essence. 

All the best, 

Thomas Keoughan  

P.S.  The following article has absolutely nothing to do with the toy business, but it makes fascinating reading.  Please feel free to skip it or take it to the beach.  Call it a light summer read.

By | August 15th, 2006|ToyJobs Blog|Comments Off on Running Harder to Stay in Place

Toy Business Hiring Still Red Hot

Toy industry hiring continues to be red hot.  Here at Toyjobs, May was the best single month (although only by a hair) in our twenty-five year history.  We continue on a pace which would eclipse our best year ever (2000).  Of course, this is ahead of the summer slowdown.  Typically, June is a strong hiring month, but July and August are fairly slow.

There have been several significant China stories in the last month.  Wall Street and the investment community seem to have finally woken up to the fact that the Chinese economy is highly vulnerable due to its enormous load of bad debt.  Beijing has been fighting a “talking” war on this but the reality is that they are playing a version of the old shell game.  They can’t make the mountain of bad debt disappear, but they had hoped to at least make it disappear from view.  It’s not an easy trick and it seems that they have not been able to pull it off. 

 At the same time, we have seen the Bush administration diplomatically snubbing Chinese President Hu Jintao and the U.S. Defense Department releasing its annual assessment of China’s military warning of an increasing Chinese offensive threat.  These were clearly messages intended for a very specific audience–the Chinese.  Washington senses weakness and the squeeze is on.  Beijing has not reacted in any major overt way…yet.  The story is ongoing.  Keep up to date by reading our China report.   

Finally, with the approaching Licensing Show, the toy business is abuzz with crypto-tales of a top secret new toy building possibility.  Meetings and tours will take place around the show.  It is obviously important for as many toy companies as possible to participate.  We at Toyjobs would strongly urge everyone to realize that there probably is no “perfect solution” but we sincerely hope that this one turns out to be “perfect enough.”   See y’all at the show.  Let the lunching begin.  

All the best, 

Tom Keoughan

By | June 13th, 2006|ToyJobs Blog|Comments Off on Toy Business Hiring Still Red Hot

Torrid Toy Hiring Despite Challenges

Toy industry hiring has started off at a torrid pace.  Here at Toyjobs we are currently on track to beat our best year ever (2000).  It’s still early, and we haven’t hit the summer slowdown yet so realistically we are unlikely to eclipse the old mark.  Frankly, we don’t even want to.  Having a year like that takes a heavy physical, mental and emotional toll.  Friends and family begin to get cranky – and I begin to get cranky too.  As long as we keep raising the bar on our second (2004) and third (2005) best year’s, I’m a happy camper.  It seems quite likely that we will be able to do that despite all the continued challenges facing the toy industry. 

Oil, resin, transportation, labor and Chinese electricity costs continue to be high and this is keeping pressure on margins even as retailers continue to play hard ball on pricing while buying less goods.  Toys ‘R’ Us store closures mean less shelves to fill and Walmart is actively cutting its inventory.

The results of this can be seen at some of the larger toy companies.  At Mattel, Barbie continues in her death spiral (down 8%) while Hot Wheels and Matchbox also slowed (down 4%).  Even American Girl which had been a star performer had sales weaken by 9%.  The only bright spot was Fisher Price where sales were up 12%.  I wonder if Neil Friedman is beginning to get all misty eyed while day dreaming about Buffalo winters.  Hasbro did marginally better but still lost money in the first quarter.  It looks like Rose Art sold out just in time with 5 Magnetix lawsuits to date.  Over the years, Larry Rosen has been described using many adjectives (not all of them printable here) but to be fair; shrewd should always be counted among them.

The tough industry climate is also reflected in the fact that the toy business is now homeless.  The TIA has to be viewed as the main villain here.  They took an exorbitant amount of time to come up with a single option that was acceptable to almost no one but themselves.  It was incredible to see that a working group consisting of mostly the same people as the TIA search group was able to come up with three or four new possibilities in the blink of an eye once they were free of TIA oversight.  Unfortunately, what I’m hearing (not confirmed) is that all of those options have slipped through the industry’s fingers because it took too long for everyone to get their act together.  It’s not easy herding cats.

The always opportunistic TIA in its seeming role as a for-profit trade show management firm, rather than that of the toy industry advocate that it should be is now charging an arm and a leg for Javits space that was made necessary by their own incompetence in finding a new home for the toy industry.  Also keep in mind that there will be additional costs of building an appealing and closed trade show booth unless you want to get knocked off by everyone with a cell phone camera and an Asian connection.  Once you have spent the money on that sleek new booth it will be easier for the TIA to overcharge you for space again next year…and the year after that…and the year after that…

Finally, we get to Walmart.  It’s always fun to throw a few rocks at the big bully as long as you can run away and hide before he beats you up.  According to CEO Lee Scott, “Walmart is making real changes.”  Let’s look at them in order:

  1. Walmart will increase surprise inspections at foreign factories in an effort to make sure that its suppliers uphold labor and environmental standards.  Gee, this is almost too easy.  Apparently, Walmart will NOT be conducting any inspections of its own stores which have been under severe publicity pressure due to its poor treatment of store employees and weak environmental record.
  2. Walmart will increase diversity in its workforce.  Yes, Walmart will constantly be on the lookout for any group of people it can employ at lower wages and with fewer benefits. 
  3. Walmart will expand its share of the Hispanic market.  Duh, Walmart will try to sell more goods to more people.  It will also try to employ more Hispanics at lower wages and then sell products to them at “everyday low prices.” 
  4. Walmart will sell more environmentally friendly products.  Apparently Walmart believes that gasoline price squeezed consumers will be more anxious to spend $2 on an energy efficient light bulb than 19 cents on a standard one. 
  5. Walmart will help competing local companies stay in business.  Uh-huh…and pigs will fly.

The only “real change” that I see at Walmart is that CEO Lee Scott is heading off on a one month paid vacation.  I would like to see any of Walmart’s store employees try to do that.  In a related (?) story, a Walmart customer who was experiencing difficulties with a self-checkout system not working properly was arrested for allegedly punching it out.  Always remember that a weaker Walmart, which still sells tons of goods but is less able to bully its suppliers, is not such a bad thing for the toy business.

All the best,

Tom Keoughan

By | May 2nd, 2006|ToyJobs Blog|Comments Off on Torrid Toy Hiring Despite Challenges

Toy Industry Hiring Gets Competitive

Toy industry hiring remains quite robust and toy companies are beginning to have difficulty securing the services of the top people they want.  While there are a lot of “bodies” out there, top people are receiving multiple offers allowing them to be more choosy than they were 2 or 3 years ago.

In order to land top people, companies must be willing to interview, decide and offer at a faster pace than their competitors.  They also have to realize that, for top performers at least, they have to offer attractive remuneration, career growth opportunities and work environments.  Those companies that move slowly either because their “hiring process” is overly bureaucratic or because it is actually their plan to postpone hiring decisions until the last possible minute (much as retailers make their buying decisions) are missing out on the talent that can drive their companies forward.  This is also true of companies that try to nickel and dime new hires or even their existing employees.  As for companies with lousy work environments, my experience is that ownership and/or senior management is generally not interested in making positive changes and they will continue to be hurt.  As a recruiter constantly on the lookout for good candidates, I love these companies.  Trust me; you don’t want to be one of them.

Please note that the above is not a forecast but rather what I’m seeing on the ground every week.  This is a particularly Darwinian time in the toy industry and that favors companies with “the fittest” and most talented staffs.  In order to hire and retain a top team:  move fast, move fair and treat them right.  That’s a formula for a staff of enthusiastic overachievers which is the backbone of any company’s success.

All the best,

Tom Keoughan

By | March 14th, 2006|ToyJobs Blog|Comments Off on Toy Industry Hiring Gets Competitive

Holiday Cheer…Well, Kinda…

Holiday shopping is in full gear and retail sales comparisons over last year seem reasonably strong, but I’m not sure that means glad tidings for the toy industry.  There seems to be a lot of consumer electronics and winter clothing going out those retail doors.  Flat screen TV’s (seemingly the “gift du jour”) are very high ticket items which skew retail dollar volume higher, but probably mean less individual items purchased, thus creating the illusion of an overall strong sales season – when in fact it really means just a very strong sales season for Samsung, Sharp and Sony.

On a smaller scale, this phenomena directly affects the toy industry when you look at the number of Xbox’s sold.  If you’re a kid getting an Xbox and a couple of games to go with it, you’re not likely to be receiving a lot of other toys once you factor in clothes, that you really don’t want, and embarrassing seasonal sweaters.

As I gaze into my crystal ball (admittedly a very cloudy crystal ball), I see toy sales for the year being flat to slightly down.  With margins being tight due to oil and resin prices, transportation costs, etc. etc. etc.; it looks to be a difficult but not terrible year.

The toy industry, like everyone else, is going to have to wait for oil prices to come down before it can begin to breathe a little easier.  Once oil prices do ease, watch out for Walmart and its brethren trying to squeeze manufacturers and capture the cost differential for themselves: “You worked on smaller margins last year; you should be able to work on smaller margins now.”

In this month’s China Report, be sure to read Why China Stands to Grow Old Before It Grows Rich, a fascinating look at what population demographics may mean for China’s future that draws some surprising conclusions.  If you are interested in reading the whole report, The Graying of the Middle Kingdom, shoot us an e-mail and we will forward it to you.

Lastly, during the layoff years of late 2000 through early 2004 and the subsequent housing boom, a lot of people have either moved or moved on and we have lost track of them.  Our Missing Person’s page has typically averaged about ten people that we are trying to track down but has recently swelled to several dozen.  Please check the list as you run into people during the holiday season (or during that long January 2nd plane ride to Hong Kong) and let us know where to find them.  Toy companies are now in full hiring mode and we have lots of job opportunities.  What better gift to give to a friend or colleague than helping them take the next step in their career?

Seasons greetings to you and your families,

Tom Keoughan

By | December 14th, 2005|ToyJobs Blog|Comments Off on Holiday Cheer…Well, Kinda…

Toy Industry Hiring Continues at Strong Pace

Toy industry hiring continues at a furious pace.  Here at Toyjobs, 2004 was our second best year out of 23 years and 2005 is likely to eclipse that.  During the 2001-2003 economic slow down, companies cut back more than fat; they cut muscle and bone.  Now that the overall economy has strengthened (although the toy industry has only strengthened marginally), companies just can’t get the work done.  Nobody really wants to hire, but everybody needs an extra pair of hands or two.

Some companies are shooting themselves in the foot in their quest for talent because they have no sense of urgency.  Larger companies with big HR bureaucracies have painfully slow processes, while in smaller companies hiring managers tend to focus on today’s emergency rather focusing on the bigger picture–having the best people on board so that they can avoid having emergencies every day.  While there are plenty of “bodies” out there, the best candidates will not wait around.  They are getting multiple offers and to secure their services, you have got to move fast.

Slow hiring processes and decision making can be made many times worse by a lack of communication.  I think it was “The One Minute Manager” which said “Never call anyone, or especially call anyone back, unless or until you have something to tell them.”  This has been great advice for “keeping your desk clean,” but a disastrous recipe for getting business done.  It’s easy to “keep your desk clean” if you’re not doing anything.  Just as it’s easy to get blindsided by problems if you’ve decided not to communicate with anyone.  Also, rather than building business relationships, you risk destroying them.  In business, people have very long memories.

In the hiring process, if you are not communicating with a candidate one of two things (or two of two things) are likely to happen.  First, the candidate may reasonably believe that you’re not interested in them and focus on other opportunities.  Second, they may decide that he/she doesn’t want to work for a company where people don’t communicate.  In either case, you have probably lost him both now and if you ever decide to pursue him in the future.  He is also not likely to give your company a great review should a colleague, who may be considering going to work for your company, happen to discuss it with him.

I often wonder, if hiring managers have any idea how many top candidates they lose because either their process or decision making takes too long or they fail to communicate.  The good news is that all three of these problems are pretty easy to fix–“Just do it.”  In the medium and long run you’ll make your own life alot easier. 

 

All the best,

Tom Keoughan

By | October 4th, 2005|ToyJobs Blog|Comments Off on Toy Industry Hiring Continues at Strong Pace