By now I’m sure that most of you have heard about the sharp deceleration in March hiring after a long string of strong jobs reports. Non-farm payrolls slowed in March to a seasonally adjusted 126,000, the weakest hiring in 15 months. Hiring estimates for both January and February were also revised downward.
My gut feeling is that things are not as bad as that report indicates, despite the press running around crying that “the sky is falling.” After all, bad news sells. The US has had a number of soft first quarters in recent years. I haven’t been able to come up with an explanation for that phenomenon that I’m satisfied with yet. Lots of correlation but unconvincing causation. Here at Toyjobs, we don’t just make stuff up but it’s still important that we recognize the pattern.
There have been lots of layoffs recently in the oil and oil service businesses and certainly that is a factor. And, for the last two years, first quarter winter weather has been horrible. Last month, job growth in construction and leisure and hospitality, two of the most weather-sensitive industries, slowed by about 90,000 jobs. Days when the office is closed due to weather also takes a greater toll than it is generally given credit for. There are the snow days themselves and then there are the next few days of playing catch up. Yes, I know everyone claims that they can get all the work done or are even more productive from home but we all know that’s not entirely true, don’t we? This means multiple days taken away from interviewing and decision making all of which pushes actual hiring down the road.
In the toy industry it is not unusual for hiring to be slow in January and February as everybody hits the road for the global trade show circuit. There is no time to interview and make decisions. A lot of companies also decide on whether to create jobs based on trade show and early year sales results. Hiring can slow even as search starts increase.
That’s what we’re seeing this year. Here at Toyjobs, after an extremely strong fourth quarter, first quarter placements have been slow as search starts have been soaring. If both unemployment figures and search starts had gone into reversal, I would be concerned that the US economy was faltering. That has not been the case. Search starts have been quite robust and those searches are now beginning to come to completion. Many will be completed in April and May – a few weeks later than usual. This leaves me optimistic that poor first quarter jobs numbers represent a delay rather than a long term slowdown and that we are thankfully about to experience a rebound.
It has been brought to our attention that a recruiter whom we generally refer to as the Obvious Huckster in Ohio (OHiO) has been spewing scurrilous nonsense about us. He has done this before and we have no doubt that he will do it again.
OHiO is simply demonstrating what he has made into a career: trying to mislead people by just making stuff up. You don’t have to believe me. Those of you who are familiar with his job board know that more than half of those jobs have been up there for more than five years. I can only suppose that he’s trying to cover for the fact that he hasn’t been all that busy since then. Actually, his entire website is full of fabrications that he apparently just plucked from the sky. One wonders if he’ll respond by publishing an honest and accurate job board now?
Here at Toyjobs, we take your future seriously. We pledge to always treat you openly, honestly, and in a forthright manner (even though you may occasionally not like it). We pledge to respond to your queries in a timely fashion. We pledge to never “just make things up.” And we pledge never to waste your time or insult your intelligence by writing and stuffing your inbox with articles on the relative merits of the color Han Purple. 🙂
As for OHiO, we can only advise: Deception doesn’t win, execution does…maybe it’s finally time that you change your focus. Should OHiO decide to print defamatory statements about us again, we will begin to publish a series, for the entire toy industry to read, of his Top 10 Sleaziest Hits. We will only publish the ones that we have complete documentation on, because here at Toyjobs, we never “just make it up.” Should OHiO cease this practice, then you will know that I am speaking the truth. If he continues, you will be able to follow his slime trail for yourselves, because we will furnish names, dates, and documents. Extreme professional jealousy can grow into a pretty serious sickness. Hopefully, this will serve as OHiO’s wake up call. Who knows? Maybe he will even put his big boy pants on and issue a retraction. I’m not gonna hold my breath. Your move, OHiO.
Several years ago, Disney, well known for its characters, movies, theme parks, and events, was able to Disney-fy Times Square. This year they achieved an even bigger coup by turning the entire Northeast into a celebration of the movie Frozen. Although not the snowiest, this was certainly the coldest New York Toy Fair ever.
As I crossed the Hudson for this year’s TOTY Awards, tugboats were breaking up ice so the ferries could get through. Carter Keithley, Marian Bossard, Robyn Gibbs and their gang put on a first-class event, as always. In fact, the whole trade show was extremely well run, although I do wish that Carter would quit lollygagging and get around to fixing the rock hard Javits floors, the electrician’s union, and the weather.
While last year’s TOTY Awards were largely won by smaller companies like Choon’s Designs and Just Play, this year was dominated by the big boys like Lego, Spin Master, and Crayola. A couple of smaller companies did slip through, like Moose Toys for Shopkins, which was named the Girls Toy of the Year, and Thinkfun’s Gravity Maze for Specialty Toy of the Year. Spin Master’s Zoomer Dino garnered both Boys Toy and Toy of the Year Honors and at the end of the evening, when it came time to announce Property of the Year, I’m sure that not a single person in the room was surprised when it went to Disney’s Frozen.
The Women in Toys Dinner was a charming event, as always. It almost has to be since there are so many women. Genna Rosenberg, Lourdes Arocho, and Shannon Gray did a fantastic job. Everything came off without a hitch so you know they had to do a lot of work. I think the best compliment I can give is – They made it look easy. The evening celebrated a Lifetime Achievement Award for Anne Kearns, who has spent her entire forty plus year career (since before she was born, I guess) at Sesame Workshop. We’ll be giving her this award again in another twenty years or so when she reaches retirement age. Congratulations to all Wonder Women Award winners and nominees.
Toy Fair itself was upbeat, if not quite as giddy as a year ago. I think last year was a little extra exuberant as the economy had just started to pick up after six long years of slogging through the swamp. Personally, I thought Saturday’s traffic was pretty good, although every single person I spoke with said otherwise. Eh, I have been wrong once or twice in the past. Sunday and Monday traffic seemed quite strong. My sources in the TIA tell me that throughout the show, traffic in The Basement of Gloom – uh, sorry! – Level 1 was very strong. As always, I saw a few toy company Presidents attending the show but not exhibiting in a booth. I tend to think that you get out of trade shows what you put into them. If you don’t put up a booth and have a presence because “this show isn’t that important” then that is going to be a self-fulfilling prophecy. After all, the major retailers like Wal-Mart, Target, Toy ‘R’ Us, Costco, Amazon, CVS, etc. are there in one place for four days. Every exhibiting toy company that I spoke with was happy to be there and had a full dance card.
Toyjobs had a very strong show. It’s always good to see everyone, slap a few backs, and tell a few stories. I came away feeling very positive about toy industry hiring moving forward. We’ll be starting a lot of new searches in the coming weeks so stay tuned. I’m also getting the feeling that the long awaited restart of hiring in marketing and product development jobs is about to begin. I don’t want to jinx it by calling it yet, but I think the tide is building.
It was great seeing everyone. May everyone have a fun and prosperous 2015.
All the best,
So what is with all the wild headline swings on retail sales numbers? On December 26th, Reuters put out “US Holiday Season Beats Expectations On a Late Shopping Surge” but then on January 14th they said “US Retail Sales Drop Biggest in 11 Months.” Oh! We had all been feeling rather good but were we wrong? Did we miss something? “Gee, I thought I had read that ShopperTrak had reported that holiday sales had risen 4.6% and Third Quarter GDP rose 5% and we all know that gasoline prices are lower. What’s going on?” Yes indeed, the Commerce Department put out a report on January 14th that retail sales for December had dropped a seasonally adjusted 0.9%. One had to dig a little deeper to learn that plunging gasoline prices had caused gas station receipts to plummet by 6.5%. When you take service stations and restaurants out of the mix, the National Retail Federation reported a 4.0% holiday sales increase from the year before. How confusing! How misleading! Why would “news” organizations report headlines in such an irresponsible way? The only thing that makes sense is that they wanted to gather more eyeballs so they can sell more advertising and at a higher price. You get a sense of this when you check the weather on the TV News. Ever since Superstorm Sandy, any little sprinkle is treated like a major dramatic event.
There was more than a little sprinkle at Toys ‘R’ Us, which reported that sales at its US stores were down 5%. TRU execs did point out that gross margins did improve 2% but one doubts that was enough to grow overall profits. There is an overall sense of chaos in most departments at Toys ‘R’ US headquarters. Last September they announced their “New Strategy” which started more than a few eyes rolling. The new tack could be summed up as “we’re going to do the same things…but better.” Uh huh…
North of the border, Target is closing its 133 Canadian stores and will stiff its vendors. Suppliers will be asked to “Look, just eat it” if they want to continue selling to Target’s US stores. Fortunately, most of the senior toy executives from small and mid-sized firms that I’ve talked to haven’t been too badly burned. I suspect that may be different for the Mattel’s, Hasbro’s, and Lego’s of the world.
Ordinarily, I would think that two years is not a long enough period to give a startup to gain traction. That said, it appears that the rollout of Target Canada was botched from the start. Their locations were mainly former Zellers stores in rundown and out of the way shopping centers. They took on too much at the same time by opening their stores and trying to build out their supply chain simultaneously, which led to rows and rows of empty shelves. Many business enterprises, including Toyjobs, live by the basic business rule, “Never try to sell anything before you can deliver it.” Lastly, their pricing wasn’t competitive. Like New Coke, Target Canada will likely be a text book case for those seeking MBA’s of what not to do for decades to come.
Fortunately for the rest of us, the Toys ‘R’ Us and Target Canada debacles are merely outliers. Holiday retail sales were up the most in many years. The economy and the employment picture are both improving. Here at Toyjobs, we had a very solid year. Both search starts and placements were back to pre-2008 levels. I hesitate to say that things are back to normal because our client’s searches were overwhelmingly focused on sales executives. Marketing and product development jobs are just starting to percolate. Typically toy companies are looking for that type of talent starting in late February (when the trade show season ends) through July. It’s a little too early to know if those types of searches will ramp up again this spring but my discussions with Toy Execs lead me to believe that they will. The economic recovery has been hampered by misguided government policies. It’s like we’ve been trying to get rolling with the emergency brake still on. The environment is now improving at a much quicker pace. Things are getting better faster. It feels like the train has left the station and is finally picking up speed. We should all be able to breathe a little easier.
I look forward to seeing you all at The New York Toy Fair. Will there be snow?
Even though traffic was slightly down during the annual Black Friday disgrace, human herds were still out in force. Many seemed to be of the opinions that this is a special holiday where they can let their worst instincts show while others appeared to feel that they had a license for legalized “wilding.” We are saddened to hear that this American “tradition” had now spread to the U.K.
This year, there was the usual litany of fist fights, Barbie doll brawls, pedestrians run over by cars in retail parking lots, and women flattened by falling big screen TVs. We also had way too many reports of police officers assaulting shoppers above and beyond the call of duty. In the video above, you can watch as officers appear to needlessly takedown a rather harmless looking woman. You can also see a group of officers repeatedly tasering some poor guy who looks like he’s just trying to get away from being tasered…again.
Retailers endlessly promote this insanity to drive excitement, foot traffic, and impulse buying. They know exactly what’s going to be rampaging through their doors and if you get hurt, you should sue them. Of course, you might be asked to explain why you would put yourself in a situation like that in the first place.
It appears that at least some people are beginning to wise up. Brick and mortar traffic and spending over the Thanksgiving weekend fell as internet sales boomed. Retailers also started offering deals days and even weeks before the main event, which may have helped to dissipate the door busting intensity.
So while Thanksgiving weekend sales were down about 11%, overall numbers for the holiday sales season have been good. The scuttlebutt is that Wal-Mart is doing very well and all internet sales (not just Amazon) are particularly strong. The toy industry is being helped by having a number of hot product lines. Anything “Frozen” or “Teenage Mutant Ninja Turtles” is flying off the shelves. And, a couple of hot lines from Australia’s Moose Toys, namely Shopkins and Little Live Pets, are doing quite well.
Overall, the National Retail Federation is predicting a 4.1% increase in sales this November and December. This year, retailers have the wind at their backs. Gasoline prices are down, which puts more money in consumers’ pockets. The economy has had strong growth over the last six months. Job growth, which began to be noticeable in October 2013 is accelerating, as seen in last Friday’s blockbuster jobs report. The consumer sentiment index has been rising since early summer and consumers are beginning to take on more credit card debt. All of this bodes well for this year’s holiday sales.
Friday’s jobs report was the best we’ve seen in quite some time. Nonfarm payrolls added a seasonally adjusted 321,000 jobs in November and payroll gains for September and October were revised higher. The report also showed that wage growth is beginning to accelerate.
I would caution employers that, for top performers, wage expansion is already here, particularly for key sales positions. Employers may be able to continue to tamp down salaries for your back office staff for a little while longer, but for VP of Sales and NAM’s at top accounts, that’s just not going to work. I’ve seen several clients do without because they don’t want to pay market rates for top sales talent. After the early 2015 trade shows as the toy industry hiring cycle switches to Marketing and Product Development, I expect to see wage pressure for the best people there, too. This might not affect wages for your number five Product Manager, but for top performers the pressure will be there.
Despite the accelerating improvement in the employment statistics, pain persists in a large part of the economy. In November, 2.8 million people had been out of work for more than six months. That’s about one third of the people who are currently unemployed. Also, approximately 7 million people were working part-time jobs because they couldn’t find full-time work. Hire these people. Help them if you can. But, don’t let their unfortunate situation cause you to think that you can continue to keep wages down for top performers. I have yet to hear a client say: “You know, don’t find me a top Target NAM from one of my competitors. Instead, find me one who has been out of work for a year.” If I heard that, I would probably fall out of my chair. Also, please remember, that as much as you’re looking to hire your competitor’s best people…your competitors are eyeballing yours. Things are getting better. You’re going to be forced to reward those people who are ready, willing, and able to run through brick walls. Things ARE getting better. You CAN afford to do so.
Here at Toyjobs, we have been running at warp speed since early August, successfully supplying our clients with the toy industry’s top talent. You can check here to see some of our most recent successes. The seasonal nature of the toy business causes it’s hiring cycles to be seasonal, so the larger share of our recent placements have been in the Sales field. Typically, we get a bit of a breather during the early part of the trade show season. I’m forecasting that after a successful holiday sales season, come late February, a lot of happy toy manufacturers will be looking to add to or upgrade their Marketing and Product Development departments. Ho! Ho! Ho! Let it be so.
Fall Toy Preview: Success Without Crowds
From an aesthetic point of view, the Fall Toy Preview was great. There was no clutter and lots of open space. At the heart of the show on the twelfth floor of the Dallas Market Center the corridors before, between, and behind the booths were as wide as boulevards. Unfortunately, the wide open spaces were the result of there being significantly fewer booths.
Attendance at this show is always tricky to evaluate because exhibitors and buyers are tucked away in closed booth cubby holes for much of the
day. My favorite “metric” is to look over the edge at lunchtime and see how crowded things look around the food court. This year the traffic was sadly sparse. Even the Starbucks line was short (scientific inquiry at its best). If the show were to be judged by looking around and taking a head count, you would think that the show was a failure…but you’d be wrong.
All the exhibitors that I spoke with were in high spirits and had very full dance cards. Buyers were there en masse. Wal-Mart, Target, Toys ‘R’ Us, Amazon, Walgreens, CVS were all well represented. In all, about 350 retailers were in attendance. There was a bit of a kerfuffle when a lone Kohl’s buyer canceled at the last minute, citing Ebola fears, although I suspect it was really more of a babysitting issue. True, both retailers and exhibitors seemed to send smaller contingents than in years past. This certainly contributed to the lower headcount. That said, the teams were sufficient to get the job done. No one seemed to be absolutely scrambling. More troubling is that year after year, more manufacturers seem to be dropping out of the event.
I hear a lot of manufacturers complain about the Dallas Show as a waste of time and money. I have listened to it for years and when I hear it, what usually runs through my head is – “you have unreasonable expectations.” If you think you are going to have a big breakthrough with Wal-Mart or Target at the Fall Toy Preview – that just ain’t gonna happen. If, on the other hand, you work the show as it is intended, focus on getting retailer feedback on product, packaging, merchandising, product packs, and pricing, you will certainly get that. Also, if you can meet with twenty mid-tier retailers in one place over a three-day period, I can’t imagine why you wouldn’t go ahead and do that. My thought has always been, if you go into a trade show with the proper expectations, you will come away feeling successful. Of course, what do I know, I’m “just a headhunter.”
Obviously, the October Trade Show Season is a mess. We have buyers running to Los Angeles during the two weeks prior to Dallas and running back to LA or Hong Kong or both in the two weeks after. For good or ill, the toy industry today is overwhelmingly centered in Southern California. So let’s agree to try to find an appropriate venue in the Los Angeles area. That should be pretty simple.
The bigger problem is scheduling. The reality is that the larger companies like Mattel, Spin Master, MGA, and Jakks Pacific don’t want to show at the same time as the rest of the toy industry. I understand the big boys wanting to monopolize buyers’ time without having them “distracted” by their smaller and often more innovative competitors. Unfortunately, this situation hurts the toy industry as a whole. It’s probably a conflict of interest for the largest companies to sit on the TIA Board, while at the same time undermining TIA events and initiatives which are meant to support the industry as a whole. It’s pretty clear that if the TIA scheduled an October show in the Los Angeles, then the big boys would just move their events to before or after it. Since they’re not going to play ball with the rest of the industry, here’s a relatively simple solution which should serve everyone.
Let there be a two week Toy Trade Show located in the Los Angeles area in October. During the first week, the largest companies can use their current spaces and exhibit their wares in the same way that they are doing now. So as to not discriminate, any other manufacturer who feels that their product line and sales volume is strong enough to peel buyers away from the big boys are welcome to rent space and try to do so. Keep in mind that buyers are going to have to get into cars and drive in Los Angeles traffic just to see you so you may be disappointed.
During the second week, the TIA can identify and arrange for a venue for all the other exhibitors, which should be a convenient one stop shop. Since the toy industry is clearly unable to arrive at and adhere to a common sense solution like this, it is up to the buyers. It is the buyers who are being run around willy nilly. It is time for them to be the grown-ups in the room and play some hardball. The buying community should come together and go to the TIA and say, “Arrange this for us. This is where we will go and this is when we will be there. If a manufacturer wants to see us, this is where they should be – end of story.” That should get someone’s attention. Do I really expect Target to kick Mattel out for not being in attendance? No, but Mattel might find that three or four feet of their shelf space was given to somebody else. Be there or be square. As for me personally, I sorta like the idea of being in New York in October and Los Angeles in February.
Meanwhile back in the USA, the economy continues to improve. In September, the headline unemployment rate fell to 5.9%, the lowest level since July 2008. Wage growth has continued to lag but that is typical of an economic recovery. Overall wages won’t rise until the talent pool grows tighter. U-6, which includes consultants and part time workers who would prefer full time work remains stubbornly high. A possible explanation are the rules imposed by Obamacare, which require employers to provide health insurance to most full time workers but not to part timers. That is causing some employers to control schedules so that people don’t work enough hours to qualify as full time.
There are reasons to be optimistic about the upcoming holiday sales season. Retail sales rose broadly in August and consumer sentiment hit a 14 month high in September. According to NPD, US and European toy sales will be up 3 to 4 per cent this year. Even beleaguered Toys ‘R’ Us had its first half comparable store sales turn positive for the first time since 2010. We have hot products which will drive consumers to the stores. Anything Frozen is flying off the shelves. Minecraft has addicted a generation of 8 year olds. Teenage Mutant Ninja Turtles are inexplicably back big time. Moose Toys has several hot lines with Shopkins, Little Live Pets, and Mutant Mania. Lastly, cheaper oil will lower gasoline prices, which should increase purchasing power for U.S. consumers in time for the holiday sales season.
Toy industry hiring continues to be strong but the mix of job openings continues to be abnormal. For our thirty plus year career, two-thirds of Toyjobs searches have been in Marketing and Product Development. Another 25% were Sales with the rest being “other” (QA, supply chain, etc.) Since last October, when toy hiring rebounded sharply, about 90% of searches have been for Sales Execs. That continues to this day. The toy industry being a seasonal business also tends to hire cyclically with August through December being the hiring season for Sales people. February through July tends toward Marketing and Product Development. I’m hoping that predictions of a strong holiday sales season prove true and that it stimulates a Marketing and Product Development hiring binge next Spring. We will have to wait and see.
All the best,