Another year – another national disgrace as the human herds were once again rampaging through the nation’s retail outlets in what is little more than legalized wilding. While spreading out the bait over several days made the peak frenzy a little less intense, it also means that we now have four consecutive days of mayhem.
As usual, we had human (?) stampedes, knockdown merch, brawls, aggressively unnecessary pepper-sprayings, shotgun battles over parking spots, a guy stabbed while carrying home his new big screen TV, police officers being dragged by cars through parking lots, and a new low: kids having a stun gun fight in a Philadelphia mall.
Thank you Wal-Mart, Thank you Target, Thank you Best Buy, Thank you Kohl’s for inciting this dehumanizing behavior. If I or a member my family was foolish enough to venture out into these deal hunting scrums and became injured; you can be sure that I’d be having a phalanx of the most rabid attorneys around suing you for intentional reckless endangerment. I’m sure we could find a slew of other legal misdeeds as well (BLACK FRIDAY DEATH COUNT)
More people were out participating in the melee than ever before, but on average, people spent less than last year ($407 vs. $423). Maybe retailers’ promotional activity pulled forward some holiday purchases earlier into November. Maybe, with smart phones at the ready, consumers are better able to make price comparisons and sniff out the best Black Friday deals. What does appear clear is that retailers have cut costs so much that it will negatively affect their margins and those of its suppliers (Wait? That’s us!).
In the meantime, toy industry hiring has soared. As reported here last time out, search starts rocketed in early October as children’s products started hitting the retailers’ shelves. Toy companies have been filling those jobs at a feverish clip which continues to this day. The pace will likely be maintained through year end. On January 2nd, the toy industry, as a whole, will board the planes for their annual pilgrimage to Hong Kong. This time out, a whole lot of business cards will be wearing fresh, wet ink.
The surge in hiring appears to be mirrored in the economy at large. Payrolls increased by a seasonally adjusted 203,000 in November. Earlier months have been revised upward and the job increases have now averaged 193,000 for the past three months.
That is nearly enough to impact the unemployment rate in a meaningful way. The jobs recovery has had false starts before, but this time it seems much more solid and sustainable.
Other economic data seem to support an improving outlook. Third quarter economic growth has been revised sharply higher to 3.6%. US consumer spending is up 2.1% from a year ago. Wages are up a modest 0.2% Consumer Confidence is on the rise and The Federal Reserve reported that credit card debt has risen to the highest amount in three years. All of those are hopeful signs that shoppers will be out buying more toys, Xboxes, and iPhones in the coming weeks.
I would like to see a few more months of improving economic data before declaring that the train has left the station, but it does appear that we are finally, finally gathering momentum. Remember folks, you heard it here first – all the way back in October…now if Washington can just stay out of the way.
It is my fervent holiday wish for the coming year that the economy continues to gather strength in a sustainable way and that there are more and more jobs for people who don’t have them and want them, especially the long term unemployed. God bless us, everyone!
All the best,
It seems to be an annual event: as children’s products ship to retailers in late August, companies start feeling more comfortable about meeting their sales goals. Timing coincides with the winding down of summer vacations and the realization that the next year’s annual sales season will begin in a few short weeks in Dallas at the Fall Toy Preview and in Los Angeles at various private toy company events. Almost every year this leads to a big surge in search starts and hiring in late August and September. A surge that this year did not come.
Up until late August, we at Toyjobs saw toy industry hiring as quite strong. In 2012, things turned the corner and 2013 was looking like a return to “not quite normalcy.” Toy industry hiring in early summer was even better than the average during good times, but when late August arrived, not only was there no surge, but activity fell off the table. During late August and September – it was dead.
First off, spring and summer toy sales were extremely sluggish. Also, retailers were very cautious about inventory – ordering smaller numbers and bringing goods in later than ever before. This, in turn, made toy manufacturers nervous.
Coming into the Fall Toy Preview, I was, unfortunately, pretty well-rested and the paper piles in my office were beginning to look small. The good news was that, as I was arriving in Dallas, children’s products were beginning to arrive in bulk to the U.S. Toy companies have now begun to feel better about themselves and search starts have rocketed. Toyjobs is currently in talks with a wide array of companies about to begin new talent searches. Those searches haven’t hit our job board (Current Toy Jobs) yet but stay tuned, they’ll be posted in the coming weeks.
As for the show itself, it seemed noticeably less busy than last year. As always, Carter Keithley and his TIA team put on a superb event, but it just looked like there was quite a bit less traffic. I don’t have the official numbers, but my unscientific survey had three components. First, the Starbucks line was much shorter than last year. Second, the great opening party thrown by the TIA seemed less well-attended. Lastly, it is important to remember that foot traffic at this show can be much higher than it appears because so many people spend much of their day tucked away in little cubby holes. My favorite “metric” is to simply look over the railing down to the lobby floor at lunchtime. This, too, proved to be disappointing. Even when I went down to lunch myself, although the cafeteria was full, I never had any trouble finding a table.
I’m NOT privy to ANY official discussions, but in my gut – I give the show three years…and my guess is that in year four, the Fall Toy Preview constituted as it is now in Dallas will be no more. I certainly hope that is not the case. We all know the reasons that this show is faltering: large toy companies holding private events in LA during the following weeks, buyers making oddly timed trips to Hong Kong, high trade show costs, etc. I’m sure that the TIA and the TIA Board have talked about this until they’re blue in the face, but I would suggest giving a member of either of those groups your input – whatever that input may be. One thing that is glaringly obvious is that there is a disconnect when the TIA Board is largely made up of representatives of companies who do not support TIA events intended to strengthen the toy industry as a whole. With broad input, hopefully a solution can be found that works for everyone.
Just my two cents,
U.S. consumers continued to increase spending in July as the economy continued to grind out a slow but steady expansion. The Commerce Department last week announced that retail sales for July climbed a seasonally adjusted 0.2%. They also adjusted the June growth rate upward from 0.4% to 0.6%.
People are seeing the value of their homes and retirement accounts rise, which has begun to create a “wealth effect.” Also, Americans have spent the last few years struggling to shed debt. Total consumer debt is now 12% lower that at its peak in the fall (just before “the fall”) of 2008. Lending and spending are on the rise, especially for the big ticket items like homes, cars, furniture, and my favorite – barbecue grills.
Consumer confidence is increasing and is at its highest level in years, which economists attribute to the gradually improving employment picture. Toyjobs concurs that, at least in the children’s product business, hiring has increased dramatically. On the jobs front, things seemed to turn the corner in 2012 after three dismal years. In 2013, hiring has been much more robust. Even the annual summer doldrums period has seen more hiring than in any of the last five years. [See Toyjobs Success Stories)
That said, there is a puzzling disconnect behind the rise in overall consumer spending and the weak recent showing of many retailers. Wal-Mart, Kohl’s, Nordstrom’s, and Macy’s last week, posted poor second quarter results and cut their profit forecasts for the year. Aeropostale, American Eagle Outfitters, and Abercrombie & Fitch also lowered their sales and profit outlook.
Part of the problem may be that spending for cars, houses, and home improvement may have eaten up dollars that would have been spent on clothing, accessories, and general merchandise. The hope is that once this pent-up demand is sated that spending will trickle down to retail more broadly. After all, one can only buy so many cars and washing machines before you have all you can use.
Holiday spending, in the aggregate, can be looked at as one big ticket item which bodes well for toy manufacturers. However, consumers will likely chase sales and hunt for value, thereby causing margin pressure on retailers. The question is will retailers eat those margin hits or will they beat it out of their suppliers in small Bentonville rooms.
On the “good news” side of the ledger, Toys’R’Us, which has been reeling as of late, has announced that it plans to add 100 stores internationally by the end of the year. There will be 19 new or reconfigured stores in the US and a total of 51 stores in China by year end. This is good news for two reasons. First, there will be more shelf space to fill which should translate into more goods sold in to the retailer. Also, it appears that ownership of the private entity is investing for growth rather than backing off after recent poor results. We wish them all the best as a strong Toys’R’Us makes the toy industry stronger.
All told, the economy is slowly gaining ground and increasing momentum like a train leaving the station. That said, we should not forget that we currently live in a bifurcated society. Most people have jobs and, for them, things are slowly getting better. However, U6 (the number of people either unemployed or having to accept only part time jobs) is still at 14%. So while 86% of us are doing alright, at least 14% are still struggling.
Fortunately, increased consumer spending on big ticket items should start to trickle down to improve retail sales as a whole. As this couples with increased consumer and business confidence, it should lead to a much better employment picture. This is already beginning to happen. We should all hope that as the train chugs out of the station and begins to pick up speed that the long term unemployed and the under employed will be able to climb aboard. As employers, we should try to haul them aboard when we can.
See ya’ll in Dallas,
PS – Dallas Alert! Dallas Alert! If you want to upgrade your sales team for the 2014 sales season, you better get cracking. You should have started two weeks ago!
The headline unemployment number has ticked down to 7.5% but the number would be higher if so many people hadn’t left the labor force. “White collar” (who actually wears white collars these days?) unemployment continues to drift between 4 and 5%.
The US economy, while not good, continues to slowly and steadily improve. Employers have been adding around 200,000 jobs a month. That isn’t enough to bring the jobless rate sharply down, but it’s better than the average 140,000 per month that we saw last year.
Housing sales have greatly increased and home prices are up 10% from a year ago. Also auto sales have improved about 7%. The various stock indices are up about 15% since the beginning of the year and consumer confidence is concurrently at a five year high.
Although payroll tax increases and the sequester are depressing consumer spending, upward momentum should begin to grow retail sales after we get through the summer. Economic growth, while still slow, is beginning to build. I liken it to a train just leaving the station.
Toy industry hiring has slowed from the torrid pace set in the first four months of the year, but continues to be steady. I look for this to continue through June and then slow down in July and early August. Come mid-August, toy industry executives will suddenly wake from their beachside slumbers and realize that the 2014 sales season is only six weeks away. The annual sprint to add new sales talent before the Dallas Fall Toy Preview will begin. If the economy has followed through and is continuing to build momentum, then the job areas of the toy industry should follow suit.
That’s my call and, for now, I’m sticking with it. Of course, I’ve always been an optimist. It’s the only way to be.
All the best,
Job growth appears to be slowing even as the headline unemployment number has ticked down to 7.6%. Unfortunately, the reason for the lower number is not job growth but rather that labor force participation has been plummeting.
Things are better than they appear for our audience. People who work in an office and wear a collar have a much lower unemployment rate of 4 to 5%. Also, toy industry folks seem to be very good at creating consulting opportunities for themselves.
Here at Toyjobs, we’ve been on fire! (Success Stories) We’ve filled so many of our client’s key positions during the last few weeks that our job board is beginning to look anemic. Search starts have slowed over the last two weeks but I attribute this to the event-driven nature of toy industry hiring.
We have entered the annual phase of the calendar where a large percentage of toy execs that I speak with are complaining that retailers are “late” with their orders. Of course, the retailers don’t think they’re “late.” They’re just pushing as much risk as possible onto their suppliers in a seasonal fashion business. In a few weeks, these orders will come in. Some of those will come so late that it will be impossible to secure factory time, manufacture, and ship the goods for arrival at the time that the retailers want them. Many toy companies will do the impossible and either get the goods there at the appointed hour or find ways to roll back the delivery date.
When the orders come over the wires, toy executives will both grumble and breathe a sigh of relief. They will also need more people to get the work done which will trigger the next wave of toy industry job openings. Except for a few ugly years, like 2009-2011, the dogs bark but the caravan passes on.
All the best,
After two snow-free years, the weather hit back with a vengeance at the 110th American International Toy Fair. While New York City itself only received eight inches or so the rest of the Northeast was hit hard by the Snowpocalypse.
Things kicked off Saturday night with the TOTY awards. As always, Carter Keithley and his Toy Industry Association (TIA) team led by Stacy Leistner organized a terrific affair. The food was superb and everyone seemed to be having a good time.
The evening awards program, organized by Jamie Gallagher of Faber Castel and Shirley Price of Funrise was fun and kept everyone engaged. The night belonged to Lego and Leapfrog who each garnered several awards. That said, it was good to see awards won by several small companies such as: Just Play, Plasmart, and Cloud B. The boys category was dominated by Teenage Mutant Ninja Turtles from Nickelodeon/Playmates.
Traffic seemed a bit off on Sunday, most likely due to weather-related travel disruptions. Countless war stories were shared by sleep deprived refugees from New England and Toronto. At the end of the day, action shifted to the Women in Toys (WIT) dinner. Genna Rosenberg and Ashley Maidy again did a great job organizing the annual event at The Lighthouse at Chelsea Piers. The evening was presided over by the always glamorous WIT president Joan Luks and it was good to see an award given to “The Queen of Toy Fair” Gail Jarvis. Particularly fun was the presentation of capes to the award winners.
Confidential sources tell me that someone looking very much like a cape wearing Nancy Zwiers was spotted over the next several days dancing around the Javits Center 🙂 Congratulations to all Wonder Woman winners and nominees.
Toy Fair traffic picked up substantially on Monday and Tuesday. Between bouts of “Javits feet”, Toyjobs was able to pick up on several young, under-exposed companies with exciting product lines. Some of these will undoubtedly be amongst our “sudden surprise” toy manufacturers of the future.
On Wednesday, we headed down to New Orleans for a few 65 degree days of good food, good music, and an evening glass of wine or three. We at Toyjobs will never drink anything out of a large Dayglo plastic toy – nor should you.
On the economic front the toy industry continues to have its challenges. Leftover retail inventory will likely mean that the first half of 2013 will be even slower than usual as little restocking needs to be done. Also, due to the management shuffle at the top, one has to believe that Toys ’R’ Us will be stuck like deer in the headlights for a considerable period of time. In addition, we continue to have a condition of torpor in Washington D.C. – nothing seems to move except their mouths. That said, total retail trade sales continue to trend cyclically upward. Warren Buffet, in last weekend’s shareholder letter said “ignore short term uncertainties, the immediate future is uncertain; America has feared uncertainty since 1776…American business will do fine over time”.
That’s the spirit that we’re seeing from our vantage point. As is usually the case, we were given a large number of search assignments in late December and January but those searches generally don’t close until the toy industry finishes cycling through trade shows in Hong Kong, London, Nuremburg and New York. Here at Toyjobs, we’re expecting to have an excellent
March as companies start to pull the trigger. In addition, search starts have been accelerating since the close of New York Toy Fair. Should this trend continue it bodes well for the industry as a whole. After the usual summer slowdown, I foresee hiring to come back even stronger in the fall as the headwinds of retail inventory and Washington gridlock abate and the economy continues to strengthen. Let us all hope it is so.
More light at the end of the tunnel,