Licensed toys remain bright spot in sluggish industry
PORT WASHINGTON, N.Y. — Ahead of the toy industry’s annual convention this February, The NPD Group has reported that U.S. retail sales of toys generated $21.18 billion in 2011 compared with $21.68 billion in 2010, a decline of 2%.
NPD looked at combined first- and second-quarter sales to account for Easter falling in a different quarter versus 2010 and found that toy industry dollars declined by close to 3% and unitsfell nearly 7%, as average retail prices increased by more than 4%. The same trend continued in the third quarter as dollars fell by close to 1% and units declined more than 8%, while average price rose 7%. The fourth quarter (October to December), which is usually a strong quarter for the toy industry, experienced a dollar sales decline 3% and a unit sales decline of 7%, while average retail price rose by 5%, NPD reported.
According to The NPD Group, licensed toys, though on average 57% more expensive than non-licensed toys, were a bright spot for the industry in 2011, with dollar sales up 2% for the year. Licensed toys represented 26% of total industry sales in 2011.
This trend will likely continue in 2012, with toy companies eager to show off their latest licensing deals at the annual Toy Fair, which takes place Feb. 12 to 15 at the Javitz Center in New York City. As in past years, attendees should expect a number of product lines connected to film’s and TV’s biggest properties.
"The over-arching story for 2011 was that consumers made purchasing trade-offs. When they did buy toys, compared to last year they purchased more higher priced toys at the expense of mid to lower-priced ones," said Anita Frazier, industry analyst, The NPD Group. ”And similar to what our NPD counterparts saw in Europe, consumers appeared to ‘shore up’ spending on toys for their own families, while share of dollars spent for ‘non-family’ members declined.”
Top properties for the year based on total dollar sales (in alphabetical order) included Barbie, Cars: The Movie, Crayola, Disney Princess and Star Wars. Based on dollar sales, Cars: The Movie, Disney Princess, Star Wars, Thomas and Friends, and Toy Story topped the list of 2011’s best-selling licensed properties (in alphabetical order).
When it comes to where consumers buy toys, mass merchants captured the biggest share of the total spend at 49%.The online channel, which had shown notable growth over the last several years, was essentially flat compared to last year in absolute dollar sales, while increasing slightly in share.
Apple bites off European retailer for new leadership
CUPERTINO, Calif. — Apple Monday named a replacement for former retail headRon Johnson, who left the company last year to become CEO of JCPenney. The companyannounced that John Browett will join the company as SVP retail, reporting to Apple CEO Tim Cook. Browett comes to Apple from European technology retailer Dixons Retail, where he has been CEO since 2007. Beginning in April, he will be responsible for Apple’s retail strategy and the continued expansion of Apple retail stores around the world, the company said in a press release.
“Our retail stores are all about customer service, and John shares that commitment like no one else we’ve met,” said Tim Cook, Apple’s CEO. “We are thrilled to have him join our team and bring his incredible retail experience to Apple.”
Prior to joining Dixons Retail, Browett held a series of executive positions at Tesco plc including CEO of Tesco.com. Earlier in his career he advised retail and consumer goods clients at Boston Consulting Group. He holds a degree in Natural Sciences from Cambridge University and an MBA from Wharton Business School.
Browett replaces Johnson, who was hired by JCPenney in June 2011 and assumed the CEO role in November of that year. Johnson is a former Target merchandising executive who for the past 11 years oversaw the growth of Apple’s wildly successful and widely heralded retail operation.
Since Johnson’s departure, Apple has shown no sign of slowing down, with net profit in its first quarter reaching $13.06 billion, or $13.87 per diluted share, and sales of its key products soaring. Browett will no doubt be expected to continue the momentum that has helped Apple dominate the CE space.
As for Johnson, his latest effort at JCPenney includes overseeing a new, simplified pricing strategy, which you can read more about here.
ICSC launches website for sales tax fairness
Washington, D.C. — The International Council of Shopping Centers announced Tuesday the launch of a new website devoted to sales tax fairness and how the current sales tax system is unable to support the 21st Century retail marketplace.
The site, 21stcenturyretail.org, will be continuously updated to provide the public, stakeholders, the media and lawmakers with information on the online sales tax loophole and resources to help level the playing field for all retailers, according to ICSC.
“Online retailers have been given a free pass for far too long at the expense of their brick-and-mortar counterparts," said Betsy Laird, ICSC senior VP of global public policy. "ICSC is among the many voices calling on Congress to close the online sales tax loophole.”
ICSC has promoted sales tax fairness for over a decade, advocating that a "sale is a sale" regardless of whether the purchase takes place on Main Street, at shopping centers, via mail-order or over the Internet.