toy industry recruiters Archives

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

It’s Crunch Time in the Toy Industry

The annual summer doldrums for the economy at large and the toy industry in particular are beginning to come to a close. Toyjobs’ fast first half start which had us on track to have our best year ever fell off precipitously in late June, July and early August. Both search starts and search closes slowed to a crawl. However, just over the past week I have noticed that things have begun to pick up. Suddenly we are having a lot of discussions about new search starts and should be beginning a number of new searches shortly. All of this is pretty predictable and is part of the annual hiring cycle for toy company jobs. Same as it ever was.

Typically in the last two weeks of August a lot of retail buyers turn all their “happy talk” into actual written orders. A few toy companies experience joy, most companies grumble even while emitting a sigh of relief and a few toy companies are left staggering like punch drunken boxers. The business is even crazier than usual this year due to wildly fluctuating costs as well as the longer lead times needed between order taking and shipping. “So, you have finally confirmed your order now that pricing has changed, and by the way we can’t get the goods to you by the time you would like them”. Most toy companies will be “okay” but will have spent the year running even faster for less sales volume and lower margins. Not exactly progress.

Crunchtime is accompanied by an annual tumult of some toy companies laying off, some companies elatedly hiring, some companies buying each other and some toy companies just collapsing entirely. In 2008, this is exacerbated by problems with the economy at large and the whirlwind is likely to be even more acute than usual.

From a toy industry recruiters perspective, it seems as if the toy industry as a whole breathes a deep sigh of relief and then suddenly is jolted to attention by the realization that the next toy selling season is only eight weeks away. A burst of hiring begins as toy jobs appear and toy companies seek to beef up their sales teams for the next campaign. Of course, just as retailers haven’t given companies enough time to produce, inspect, ship and deliver goods by a specific date; now toy companies haven’t given themselves enough time to staff up and fill those jobs by the Fall Toy Preview. Even with resumes already on their desks, most companies won’t be able to execute hires that quickly. Some will. The message here is “Don’t Wait!” Every year it’s a mad scramble and that scramble has already begun.

Even as business continues through this stormy period, there are beginning to be a few brief patches of light. Sales at Walmart and a few other retailers (Walgreen, BJ’s) are doing well even as overall retail remains sluggish. More importantly oil prices have begun to ease which should translate into lower resin and transportation costs and if retailers allow toy company price hikes to stick – wider margins next year. Our short term forecast is for a rebound in toy company jobs this autumn but not as big of a rebound in toy jobs as usual.

With the Olympics underway, all eyes are focused on China (albeit with brief glances to the Caucasus). We have lots of non-Olympic China news in this month’s China Report. Now that we know that spyware has been installed in many Chinese hotel rooms and in Chinese taxicabs, our main feature focuses on a few methods to combat this increasing threat (we’ll post it on our website for future use). Toy industry executives certainly travel a lot in China but you might want to consider adopting some of these strategies here at home especially now that in Los Angeles a U.S. Court has determined that in the toy industry, intellectual property theft even occurs on U.S. soil. Who woulda thunk it? Here at Toyjobs we have revamped our website and added a few new features. We hope you like it and find it useful. Please feel free to send our comments and/or the usual blistering critiques.

Wishing for more toy company jobs,

Tom

By ToyJobs|2020-11-20T08:51:04-06:00August 15th, 2008|ToyJobs Blog|Comments Off

Toyjobs Posts Third Best Year

Toyjobs posted its third best year out of twenty-six for 2007. It was a crazy and confusing period. With 2006 being our second best year coupled with 2006 toy sales being up 4 to 5 percent (rather than the usual down 4 or 5%) I figured we would start strong in 2007, but that’s not the way it happened. There were not a lot of toy company jobs available in the early going and in fact our sales were only at about fifty percent of normal through the end of June.

August brought not only the beginning of toy safety recalls but toy company hiring exploded. I would have thought with toy recalls, the housing market meltdown, the sub prime crisis and weak retail sales, that hiring would be subdued, but the frenzy continued until the very last day of the year. After twenty six years as a toy recruiter, I am usually able to divine some sort of rhyme or reason between toy industry conditions, the economy and hiring trends but I can’t even begin to fake an explanation for what went down in 2007. When hiring conditions were ripe, no one was hiring and when things looked their bleakest, companies were filling toy jobs hand over fist. It’s not that companies began hiring a raft of product safety people either. Toy companies were too busy fixing the crisis at hand. It was only after Thanksgiving that we started receiving a lot of calls from toy companies about hiring product safety professionals for the next manufacturing cycle.

Toyjobs is approaching 2008 with caution. With the exception of Walmart (up 8.4%) and Costco (up 10%), total December sales were pretty poor across the board. Costs continue to skyrocket. We still have high oil, resin and transportation prices. Add to this, rising wages and fuel riots in China, not to mention the rising yuan. Chinese factories are demanding 10-30 percent increases to manufacture goods. Although I have often heard “everyone’s costs are rising, so retailers will be compelled to let us raise prices”, I haven’t believed a word of it. Retailers have forced prices down for the past ten years even as costs continued to rise. Prices need to correct but retailers aren’t letting it fully happen. The toy industry executives I have been speaking with tell me that they are getting increases of 5-8 percent. With Chinese factories either standing firm or going out of business in ever increasing numbers, that means the extra cost increases will likely come out of US toy company margins. To their credit, I have spoken with several toy industry executives who have been walking away from potential business because of onerous pricing or terms (something we have long practiced at Toyjobs). Unfortunately, there will always be some genius who will sell product at a loss and try to make it up in volume. He may not last long but there seems to always be another bozo to take his place.

For 2008 there will be winners and losers and about half the companies I’ve talked with are gung ho while the other half are pulling in their horns. If I look at late December and January search starts, Toyjobs is up over our historical averages, so we are starting 2008 strong even as the press and the pundits are trying to talk the country into a recession.

I used to be able to explain everything but for now I’m just going to work hard and not plan any overexuberant spending either professionally or personally. Look for me to start shooting my mouth off when I’ve figured it all out again.
See you in February,

All the best,

Tom

By ToyJobs|2020-11-20T08:51:05-06:00January 28th, 2008|ToyJobs Blog|Comments Off