U.S. employers have continued to hire at a steady clip bringing the jobless rate down to its lowest level in nine years. That’s good news for toy manufacturers as ‘Sell Through Season’ is going strong with total retail sales up sharply.
Foot traffic at stores has been somewhat thinner than the frenzied human herds of years past after retailers began offering discounts as early as Halloween and many Thanksgiving weekend promotions were also available online. Many Americans feel that it’s easier to shop from the sofa rather than to fight one’s way through the mall.
Reduced crowds meant reduced violence which can only be a good thing. That said, there did seem to be an increase in parking lot gunfights so you will still not see me anywhere near a retail outlet on that particular weekend. College kids promoting “Black Friday Brawl” videos online were left offering mostly tame fare and even resorted to posting previous years’ hooliganism under this year’s banner. There was a much shown wild melee in Modesto, California but if you watched it, you would have seen that those kids didn’t know how to throw a punch.
Sales of Hatchimals, Nerf guns, Star Wars Drones, and 4K TVs seem to be driving holiday sales but there is more than enough volume to go around. Here’s to a strong continued sell through season! Strong sell through makes toy companies happy. Happy companies hire. Here at Toyjobs, we like that.
(Sell through) Seasons Greetings,
In recent years, the Dallas Fall Toy Preview has been characterized by more and more toy manufacturers pulling out of the exhibition. This is the result of a split show which sends both manufacturers and retailers scurrying to Los Angeles, then Dallas, then back to Los Angeles, and finally to Hong Kong. Something had to give and it appears that now something has.
This year the dates of the Dallas show were moved forward so as not to conflict with the Jewish holidays, but that caused a direct conflict with Toy Show activities in Los Angeles. As a result, the entire Retail Midwest didn’t show up. There was zero representation from: Kohl’s, Meijer, Walgreens, Kmart, Costco, or Shopko. It was great to have large contingents from Wal-Mart, Target, and Toys ‘R’ Us. It’s always good to get as much face time with them as you can. But the reality is that they really conduct business in their headquarters. Most toy manufacturers will see them there and prefer to see them there.
I’ve always felt that at a trade show, it’s best to focus on mid-tier retailers. If they are all in one place and willing to give you some quality time, that’s where you can justify the cost of the show. Manufacturers can also save the time and expense of trucking to Menomonee Falls or Walker, Michigan.
Don’t get me wrong – I love the Dallas Show. There are open showrooms and toy executives have a fair amount of down time. If I can spend two days and meet thirty toy company Presidents, I’m gladly going to do it. In fact, most toy industry types I talked to like the show itself. It’s relatively inexpensive. It’s compact and people get to see friends and acquaintances from across the industry because everyone is pretty much in the same place day and night. That said, the show can’t go on if it doesn’t make financial sense
After 2016’s lack of retail support, I’m predicting a thirty percent decline in exhibitors in fall of 2017, followed by a 2018 Zombie Walk. Clearly a better solution must be found. The composition of the TIA Executive Committee and Board of Directors seems to be less dominated by Mattel, Hasbro, and Lego than they have been in quite some time. That may provide an opening for less table tipping in trade show planning. It’s time that the show moves to Los Angeles. I often hear that there isn’t a good venue, but that’s hard to believe. There’s the LA Forum and the Los Angeles Convention Center has lots of different size halls available. Truth be told, we only take about two full floors of the Dallas Market Center. I can imagine that two adjacent hotels with exhibitors taking out suites and conference rooms might work. If you think about it, that’s really not so different than the old New York Toy Building.
The real problem has always been timing. The larger companies: Mattel, Spin Master, Jakks Pacific, MGA, etc don’t want to show at a time when buyers may be distracted by their smaller, nimbler (and more creative?) competitors. One answer would be to have a seven to ten-day show with one part dedicated to large companies at their headquarters or El Segundo showrooms and another part focused on small and medium sized companies located at some centralized venue. Manufacturers could be able to choose which group they wanted to join but might find it difficult to command buyer attention if they picked a group that was inappropriate for them. In any case, that’s my two cents. I am now going to duck and cover in a probably vain attempt to avoid incoming poison arrows.
As for the toy industry itself – things continue to be strong. Toy sales have grown 6-7% for the last year and a half, despite somewhat sluggish retail sales. That is making toy companies happy. Happy companies hire. Here at Toyjobs, we are on track to have the third best year in our thirty-five-year existence. In fact, I’m ready to proclaim that toy industry hiring is “Back to Normal.” 2016 has brought a resurgence in toy company hiring of Marketing and Product Development people. From 2009-2015, toy hiring was all about: Sales, Sourcing, and Safety. Sell more – make it cheaper – get us through the regulations. I believe that the strong increase in Marketing and Product Development jobs indicates that toy companies are being less defensive and are now aggressively pursuing new products and new initiatives. That can only be good for the toy business as a whole.
Looking ahead to the holidays sales season, I see no reason why strong toy sales should not continue. Unemployment rates continue to come down. Median household incomes have surged over the last year. Consumer confidence is climbing. This should translate into continued strong toy sales. Robust sales should mean that happy companies continue to hire through this year and into next. May it be so.
All the best,
P.S. My “Back to Normal” comments apply only to toy industry hiring. One need only look at the current election cycle to see that the world at large is certainly not “Back to Normal.”
To better understand all the conflicting economic indicators being reported, one needs to dig a little deeper than the headline numbers. Hiring has been strong for most of the year which has lead an increasing number of people who left the workforce to rejoin it. More jobs has meant higher consumer confidence and a greatly increased consumer spending. Some of the increased consumer spending has also been driven by banks.
Bank profits have been squeezed by long term, record low interest rates. To make up for it, they have been pumping credit cards out to more people and increasing credit card loan limits while at the same time increasingly loaning that money to riskier borrowers. Over the past year, US banks have added $54 billion in loans to consumers through loans on credit cards. After contracting during the financial crisis, credit card debt is not expanding at its fastest rate since 2007.
You would think that economy would be booming but GDP has only grown at a 1% rate thus far this year. The problem is that businesses have been holding back on spending on everything from computers to new equipment and factories. We need both consumer and business spending otherwise it’s as if the economy was trying to ride a bicycle with only one pedal.
If businesses are confident enough to hire, why aren’t they also putting money into expansion efforts? Oneexplanation is that workers are relatively cheap and also easy to get rid of should the economy slow. There is also plenty of spare production capacity, so companies don’t yet have much incentive to devote funds to new projects. Most companies will be conservatives with their balance sheets until they see signs of a growth rebound. They will also hold off investing until they have a better sense of the future tax and regulatory regimes that they are likely to face next year. Business spending should begin to pick up after the November elections, regardless of who is elected as businesses are better able to forecast.
The good news for the toy industry is that business is booming. Toy sales have been growing for the last year and a half at a 6 to 7% annualized rate. Strong sales have also mean that toy companies have been adding people. Toyjobs is having a bang-up year and is placing people at a level we haven’t seen since 2008. It is also heartening to see the return of hiring in the Marketing and Product Development sectors. Hiring in these areas has been extremely slow since the beginning of the financial crisis. I’m a little concerned that we haven’t seen the usual avalanche of toy Sales jobs that we usually see this August. Perhaps toy execs are all away on vacation. They better wake up! Fall Toy Previews are only four weeks away! I look forward to seeing everybody there.
All the best,
After a weak first quarter, Toyjobs followed up April, its best month ever, with a strong May showing. This mirrors the economy as a whole which, during the last couple of years, has had a series of weak first quarters following by markedly increased (although still tepid) growth. The latest projections from the Federal Reserve Bank of Atlanta are for second quarter GDP growth of 2.5%. Overall, it should come as no surprise that the toy industry has been hiring, even though some companies have experienced a bit of a Star Wars hangover. NPD has reported that toy sales in the US increased 6.5 % in 2015 and another 6% in the first quarter of 2016.
Moving forward economic signals appear to be mixed. US credit and debt balances have been soaring as consumers grow more comfortable carrying debt and spending money.
Pending home sales rose in April to the highest level in over ten years. April also saw consumer spending rise after a six-month slump. Wal-Mart rocked to a strong quarter even while many other retailers struggled.
On the other hand, the US has suffered two weak job reports in a row with the May report being particularly devastating. In May, employers added only 38,000 jobs – the fewest in almost six years.
Revisions to prior reports also subtracted a total of 59,000 jobs from payrolls in the previous two months. Add to that the numbers of Americans working part-time jobs who want full-time jobs shot up from 6 million to 6.4 million. These “involuntary part-timers” continue to be a sign of considerable weakness in the job market. Finally, although the headline unemployment rate dropped to 4.7% this was largely due to a steep decline in labor force participation as millions of people have left the workforce in frustration.
The future is murky. Two bad months do not make a trend, but they may be a sign that the economy is losing what momentum it did have. On the other hand, maybe this is just the annual summer doldrums beginning a couple of weeks early. In any case, this is not the time to load up on debt or go out and buy a new Ferrari. Uncertainty calls for caution.
Here at Toyjobs, we are cautious but also quite optimistic. Over the last fifteen months, toy sales have been much stronger than the economy as a whole. I have no doubt that in six to eight weeks, toy companies will realize that the 2017 toy selling season is coming up fast and will begin the annual mad scramble for new or additional Sales Executives. Be advised that the Dallas “October” Fall Toy Preview arrives a little early this year on September 27th. It would be prudent to start your sales searches in late July or early August if you want your new people on board and ready to go.
All the best,
In April, Toyjobs has logged its best month ever and we still have ten days left. In the toy business, a lot of searches are started early in the year but companies have difficulty arranging interview times and moving the ball forward in January and February due to all of the trade shows. Lots of jobs end up getting filled in March and April. That’s what we have seen in each of the last two years.
Search starts are continuing at a rapid pace. Toy sales were up approximately 6.5% last year. That makes companies happy and happy companies are hiring! Let’s hope it continues. Lots of hiring is good for everyone.
I’m sorry this is so brief but I gotta get back to work.
All the best,
Despite frigid temperatures, New York Toy Fair opened on Friday night, February 12 with the TOTY Awards. The Toy Industry cognoscenti staggered in under the weight of multiple bearskins to this always special event. This year, it was held at the American Museum of Natural History under the belly of a Great Blue Whale. After an Alan Hassenfeld speech, which was perhaps a wee bit too long, Disney’s Robert Iger was honored by being inducted into the Toy Industry Hall of Fame.
“And the Toy of the Year is… Doc McStuffins Pet Vet Checkup Center from Just Play!” The combination of kids and animals is hard to beat. I was happy that I didn’t hear the usual grumbling that “only the big companies win.” This year’s winners included smaller companies like Moose Toys, KidKraft, Learning Resources, Hexbug, and Razor. Even Just Play was only founded eight years ago. Their growth is a tribute to the leadership of Geoff Greenberg and Charlie Emby.
On Sunday night, Women in Toys celebrated its 25th anniversary with the Wonder Women Awards Dinner. Genna Rosenberg and her team organized a terrific evening and, as usual, made it look easy – although I’m sure there were plenty of fast paddling feet below pond level. Women in Toys has come a long way, baby – since it was founded by Anne Pitrone and Susan Matsumoto in the back of an Irish pub. One suggestion, though – don’t put a bar at the entrance or you will bar the entrance. Put what people want in the back. This is basic retail merchandising a la Walgreens and CVS. Congratulations to all the Wonder Women winners and nominees. May you wear your capes with pride.
Saturday was bitterly cold but the Javits Center had the heat cranked as Toy Fair proper began. People were in a jovial mood after a year where US toy sales grew by 6.7 %. The aisles were crowded and everyone was upbeat. It was even bustling down in the basement of gloom, which in 2016 turned out to be not so gloomy after all. My completely unscientific gut poll says that Monday was the busiest day but I’m not sure if that is truly correct. From the TOTY Awards through end of day Monday, new TIA President Steve Pasierb and TIA SVP Global Events Marian Bossard and their team ran a terrific event. Kudos for doing such a great job! I’m sure it’s a lot more work than anyone imagines. The only suggestion for improvement I can think of is (and we’ll put Marian on this) – softer floors.
“Wait a minute, Keoughan – you said TOTY’s through Monday – what happened to Tuesday?” On Tuesday, I was enjoying lunch at Galatoire’s. I had made my annual post Toy Fair escape to N’awlins where the temperature was 70 degrees and the oysters wereplentiful. I encourage everyone to do it. There’s plenty of room for y’all.
Looking forward, I’m expecting 2016 to be a banner year for the toy industry hiring. Last year’s strong sales numbers, led by Shopkins and Star Wars merchandise, have led to happy companies. Happy companies hire people. This year, I’m expecting big things from Auldey. I also expect that little known Propel RC to stop “flying below the radar.” And – lest we forget – we have another Star Wars movie.
It has been exciting to see the resurgence in toy companies hiring of Marketing and Product Development people. During the financial crisis, what hiring there was, was all about Sales and Sourcing (buy cheaper – sell more). I take the recent resurgence in Marketing and Product Development hiring to mean that companies have stopped just playing defense. The toy industry is looking to take risks and do new and exciting things again. That bodes well for us all.
May the force be with us,
P.S. Tragedy struck at Toy Fair with the passing of Elise Lachowyn. I remember helping Elise land her first toy job at Buddy L Corp. back in 1994. She grew into the consummate professional. Always upbeat, always ready for the next challenge. Our thoughts and prayers are with Elise’s husband, Drew, and daughter, Skyler. Tech 4 Kids has set up a GoFundMe Campaign to help fund Skyler’s education: https://www.gofundme.com/eliselachowyn