The rebirth of TRU; Mattel supports Despicable Me franchise; Walmart and DreamWorks unveil VR event; Nickelodeon reveals 20th anniversary plans for SpongeBob; The fate of Payless; plus other top brand licensing and retail news.

Licensing, marketing and retail expert/opinion leader Tony Lisanti provides insight and perspective for the top headlines of the week. “Licensing and Merchandising Report” is a must read for top execs who want objective, straightforward and authoritative analysis.

The Toy Redux

It’s only fitting that as the annual TIA Toy Fair kicks off this weekend in New York that the discussion will focus as much on the rebirth of Toys “R” Us as it will on new and innovative toys as well as various new licensing deals.

Toys “R” Us has officially emerged as a new company, with new leadership and a new vision to deliver the magic of its iconic brands around the world.

Led by TRU’s former global chief merchandising officer Richard Barry, who now serves as president and CEO of the new toy company, Tru Kids Brands has begun an aggressive strategy to expand the retail brand worldwide. With its global partners, Tru Kids Brands has plans to open 70 stores this year in Asia, India and Europe and the develop a new e-commerce platform.

However, no definitive plans for stores in the U.S. have been announced yet, although there will undoubtedly be some expansion of brick and mortar stores in major markets.

Regardless of any expansion strategy, there are numerous questions about this venture from its funding to vendor support as well as the skepticism that exists over the viability of the name, its inherent value, perception and potential for success.

As revealed again last week when the two major toy and entertainment companies released annual results, the demise of TRU has caused lingering effects on their performance. Therefore, the question as to whether Mattel and Hasbro—along with other toy companies—will support the revival of TRU and to what extent, lingers throughout all silos of the toy business and will be a part of many discussions in the exhibit aisles of the Javits Center.

Furthermore, the question as to whether another toy retail is necessary per se, and can succeed in what has become a very fragmented and highly competitive business, is a major concern.

There is little doubt that the demise of TRU left major challenges in the marketplace, but there have been numerous initiatives among other retailers to garner a share of the toy business, from major entertainment licensing brands to gaming brands to tech brands to the small toy developers.

Said Barry, “Despite unprecedented efforts to capture the U.S. market share this past holiday season, there is still a significant gap and huge consumer demand for the trusted experience that Toys”R”Us and Babies”R”Us delivers. We have a once-in-a-lifetime opportunity to write the next chapter of Toys”R”Us by launching a newly imagined omni channel retail experience for our beloved brands here in the U.S. In addition, our strong global footprint is led by experienced and passionate operating teams that are 100% focused on growth.”

The TRU Kids Brands’ management team includes Matthew Finigan, CFO, James Young EVP of Global License Management & General Counsel, and Jean-Daniel Gatignol, SVP of Global Sourcing & Brands.

In addition, the company named brand management veteran Yehuda Shmidman as vice chairman to advise on global strategy and execution. Shmidman is the CEO of Wave Hill Partners, and the former CEO of Sequential Brands Group.

TRU Kids has the rights to all of the former brands of TRU including Toys “R” Us, Babies “R” Us, Geoffrey the Giraffe, Journey Girls, Fastlane, True Heroes, You & Me, Imaginarium, and Just Like Home.

Retail and toy execs were unsettled last year and will remain so as the toy sector continues to fluctuate and find stability as well as new opportunity in the post TRU world.

Mattel And Universal Partner For Despicable Me

Mattel has signed a three-year global licensing agreement with Universal Brand Development and Illumination for the Despicable Me franchise and Minions sequel.

Mattel plans a wide variety of products including action figures and dolls, play-sets, vehicles and radio control toys, games, plush, role-play and accessories that will retail shelves in conjunction with the film’s release in July 2020.

This is another positive deal in Mattel’s overall restructuring strategy that also includes the content development of its own IP, including Barbie and Hot Wheels.

“As the stars of the highest-grossing animated franchise to date, Illumination’s Minions have captured the imaginations and hearts of people around the world,” said Janet Hsu, chief franchise management officer, Mattel. “We are delighted to partner with Illumination and Universal Brand Development to provide fans of all ages a deeper connection to these beloved characters. Mattel is committed to strategic collaborations with globally-recognized franchises, which are helping to drive our transformation into an IP-driven, high-performing toy company.”

“As we continue to develop richer, more engaging ways for fans to interact with our brands, we are excited to collaborate with Illumination and Mattel to design a brand-new line of toys and consumer products, inspired by Illumination’s Despicable Me franchise,” said Vince Klaseus, president, Universal Brand Development. “Illumination’s Minions are a global pop-culture phenomenon, embraced by all ages and cultures, and we’re excited for the global launch of Minions 2 and for Mattel’s new toy and products lines, which are sure to inspire creativity, open up new ways to play and extend the storytelling.”

Illumination’s other upcoming films include The Secret Life of Pets 2 in June 2019 and Sing 2 in December 2020.

Walmart and DreamWorks Unveil VR Experience

Walmart and DreamWorks Animation have partnered for a virtual reality immersive series of events for the upcoming theatrical release of How to Train Your Dragon: The Hidden World, which debuts February 22.

Called the How to Train Your Dragon: The Hidden World Virtual Tour, which is powered by sponsors HP, Intel and Positron, will visit almost 20 Walmart parking lots in key cities.

Spatial&, a V-commerce startu, collaborated with DreamWorks Animation to create this VR-driven shopping event. In addition to the VR experience, licensed merchandise from plush toys to action figures to DVDs and video games, will also be offered.

“Collaborating with DreamWorks Animation and its iconic How to Train Your Dragon franchise is such an exciting way to bring Spatial&’s first ever activation to the public,” said Katie Finnegan, chief executive officer of Spatial&. “Spatial& was founded based on the belief that VR will transform merchandising and retail and we can’t wait to finally share this uniquely immersive shopping experience with consumers across the country.”

The How to Train Your Dragon: The Hidden World Virtual Tour is a great opportunity for our customers to engage with this fantastic franchise. It’s also the most recent example of how Walmart continues to use emerging technologies, including virtual reality, to enhance the experiences of shoppers across the country,” said Scott McCall, senior vice president for entertainment, toys and seasonal, Walmart U.S. “Customers will also get a preview of the exciting new products available at Walmart for How to Train Your Dragon fans of all ages at the great prices customers expect from Walmart.”

Nickelodeon Fetes 20 Years of SpongeBob

Nickelodeon has released a multi-faceted strategic plan to celebrate the 20th anniversary of its iconic franchise, SpongeBob SquarePants. The celebration will focus on the “Best Year Ever” tribute to the popular series which launched July 17, 1999 and has become a pop culture phenomenon that includes everything from fan merchandise to the Broadway musical.

The entertainment licensor has worked extensively to develop new and innovative content, marketing and merchandise to extend and grow the franchise and its fan base. The 20th anniversary strategy will further strengthen the SpongeBob brand not only for its current fans but for the next generation.

According to Nickelodeon, the SpongeBob franchise has generated $13 billion in retail sales of consumer products over its 20-year history.

The “Best Year Ever” begins Friday, July 12, with the premiere of “SpongeBob’s Big Birthday Blowout,” an original mixed live-action and animated special and leads up to the Paramount Pictures and Nickelodeon Movies theatrical, The SpongeBob Movie: It’s a Wonderful Sponge, coming summer 2020.

“The tiny residents of Bikini Bottom have held the world’s attention for a remarkable 20 years and we owe it all to the monumental creator Stephen Hillenburg,” said Ramsey Naito, EVP, animation production and development, Nickelodeon. “This anniversary special is a love letter to everyone in the universe of SpongeBob, from the fans across the globe to the incredible creative team, crew and talent who continue to bring these great characters to life.”

Nickelodeon will also commemorate the series with numerous initiatives including a new product line by master toy partner Alpha Group, featuring toys, collectibles, plush and novelties showcasing SpongeBob’s iconic meme moments; new product categories in consumer packaged goods and health and beauty, including the first-ever range of SpongeBob cosmetics, as well as special-edition product; collaborations with lifestyle brand Cynthia Rowley for a SpongeBob wetsuit and international mixed-media artist Romero Britto that will be exhibited at pop-up SpongeBob experiences across the U.S.; and the launch of a dedicated YouTube channel and mobile game.

SpongeBob SquarePants—which was created by the late Stephen Hillenburg, and Marc Ceccarelli and Vincent Waller, who now serve as co-executive producers—is currently seen in 208 countries and translated into more than 55 languages.

Walmart Debuts New PL Furniture Line 

Walmart has turned to a collection of modern furniture to strengthen and expand its ecommerce home business. Called MoDRN, the new collection features 650 items across all room types.

Said Anthony Soohoo, SVP and group general manager, home, Walmart U.S. eCommerce: “Created for customers who embrace a modern aesthetic, MoDRN boasts three collections that are incredibly stylish—Retro Glam, Refined Industrial and Scandinavian Minimal. MoDRN provides the elevated look and feel that you would typically find at a specialty store, without the elevated price tag. The line incorporates high-end materials—think velvet and performance leather upholstery fabrics, Carrara marble table tops, native and exotic veneers, hand-brushed metal and brass accents, and solid wood features in white oak and walnut.”

SooHoo said other exclusive collections are in the works and will be unveiled in the coming months.

Barnes & Noble Plans LEGO Movie Events

Barnes & Noble will hold in-store events on February 23 to coincide with the release of The LEGO Movie 2: The Second Part.

B&N continues to do whatever it can to create excitement and bring customers to its stores and what better way to achieve its goal that with the incredibly popular Lego brand and movie franchise.

Customers will have the opportunity to build and take home Emmet’s Dream House/Rescue Rocket, play activities, and get free giveaways, while supplies last.

“We are thrilled to welcome LEGO fans to our stores to celebrate the highly-anticipated film,” said Kathleen Campisano, vice president, Toys & Games, Barnes & Noble. “This event will bring the movie to life by offering fans the chance to have a special, exclusive experience, as well as take home a 2-in-1 build of their very own, Emmett’s Dream House/Rescue Rocket.”

Barnes & Noble is also offering the new line of LEGO products including building sets and Young Reader books.

Surprise News of the Week: Activision

While the Overwatch League began its 2019 season with 20 teams competing for a share of the $5 million prize pool, and parent Activision reported record sales, the company surprised everyone from the Street to its own employees by announcing layoffs of 8% of its workforce or almost 800 people. Consider the following and draw your own conclusions!

Activision Blizzard’s reported record net revenues of $7.5 billion compared with $7.02 billion for 2017 and record net revenues from digital channels of $5.79 billion.

Bobby Kotick, chief executive officer of Activision Blizzard said: “While our financial results for 2018 were the best in our history, we didn’t realize our full potential. To help us reach our full potential, we have made a number of important leadership changes. These changes should enable us to achieve the many opportunities our industry affords us, especially with our powerful owned franchises, our strong commercial capabilities, our direct digital connections to hundreds of millions of players, and our extraordinarily talented employees.”

Bad News of the Week: Payless Liquidation

In what could be another major blow to the licensing sector, Payless is planning to close its 2,300 stores when it files for bankruptcy later this month, according to a Reuters article. The question I have is who is going to save this retailer? I don’t believe there will be many suitors. And so, the retail apocalypse continues. 

Deal of the Week: More from Magnolia

Lifestyle celeb and design guru Joanna Gaines, who has launched extensive collections with Target, is adding to her portfolio. Gaines has unveiled a home décor collection with Anthropologie that features pillows and rugs in various styles.

Fun Deal of the Week: KISS emojis

Epic Rights, the global licensing agent for KISS, and the emoji company, are developing an extensive catalog of images.

Lisa Streff, EVP of Epic Rights, said: “More than 6 billion digital icons are used on a daily basis. There is simply no better way to express emotions or to convey a message than by saying it with icons. We are thrilled now to offer KISS x emoji to the millions of KISS fans around the world.”

Marco Huesges, CEO of The emoji company, said, “the emoji brand truly is one of the most powerful and communicative global lifestyle brands, moving and influencing people all of the world, in the same way that KISS has for 45 years. This partnership is the perfect symbiosis of two global power brands.”

Epic Rights and the emoji company have appointed the following licensing agents around the world to represent the unique KISS x emoji program: Celebrities Entertainment – Germany, Austria, Switzerland; CPLG – France; Exim – Argentina, Uruguay, Paraguay; JM Brands – Benelux; Lotus Global Market – Brazil; Merchantwise – Australia, New Zealand; Retail Monster – United States; Segal – Canada; Tycoon – Mexico.

Stat of the Week: NRF Holiday Sales 2019

The National Retail Federation reported that Holiday retail sales for 2018 grew a lower-than-expected 2.9% over the same period in 2017 to $707.5 billion.

“Today’s numbers are truly a surprise and in contradiction to the consumer spending trends we were seeing, especially after such strong October and November spending,” NRF chief economist Jack Kleinhenz said. “The combination of financial market volatility, the government shutdown and trade tensions created a trifecta of anxiety and uncertainty impacting spending and might also have misaligned the seasonal adjustment factors used in reporting data. This is an incomplete story and we will be in a better position to judge the reliability of the results when the government revises its 2018 data in the coming months.”

The National Retail Federation forecasts that retail sales for 2019 will increase between 3.8% and 4.4% to more than $3.8 trillion.
Year-over-year results from key retail sectors during the November-December holiday season include:

  • Online and other non-store sales: up 11.5% at $146.8 billion.
  • Clothing and clothing accessory stores: up 4.2% at $61.7 billion.
  • Health and personal care stores: up 2.6% at $60.8 billion.
  • General merchandise stores: up 2.3% at $146.8 billion.
  • Grocery and beverage stores: up 1.9% at $130.5 billion.
  • Building materials and garden supply stores: up 1.6% at $61.5 billion.
  • Electronics and appliance stores: up 0.2% at $22.3 billion.
  • Furniture and home furnishings stores: unchanged at $22.6 billion.
  • Sporting goods stores: down 13.5% at $16 billion.