The Bugg Report Magazine - Edition 25 by thebuggreport

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THE

FEATURE INTERVIEW MOOSE TOYS

INDUSTRY NEWS IN-DEPTH INTERVIEWS

REPORT FEATURE ARTICLES INDUSTRY INSIGHT

Moose Toys An Australian Success Story

Manny Stul talks toys, treehouses, innovation and the value of the right people. FULL INTERVIEW PAGE FOUR

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â&#x20AC;&#x153;From the Editorâ&#x20AC;? I have spent some time recently speaking to industry people about what they think the future holds, not only in terms of their own businesses but the broader retail space as well. It has been clear for some time that the internet has changed things forever in terms of selling products online as well as in physical stores, but it seems that the adoption of this new platform has been slow in many cases. If we take Australia for example, we are one of the slowest adopters of online sales, which is interesting. Is it because we are so far away from the rest of the world and purchasing online can mean not getting the product you ordered for a matter of weeks? Perhaps it is because there is a fear of putting your credit card online? Whatever the reason, it is safe to say that the future will inevitably see online taking a much larger role in retail sales in Australia. Purely from a browsing point of view, the ability to sit at your home and view an entire product catalogue online is appealing in so many ways. Amazon will enter the Australian market this year and their entry into the retail space here will be a great indicator of how Australians will react to online sales, when they know they can purchase online and get what they ordered almost immediately. The attraction with Amazon is such that the prices will be cheaper and the delivery will be swift. The basic concept of the internet and online sales becoming a much bigger part of retail is one thing, but realising this and capitalising on opportunities is another. The question is where are the opportunities

and how can they be turned into sales? Think of pop-up stores, promotions and live events. These are all great drivers for brand awareness, but what used to be a matter of attention has become a matter of engagement. Attention now means very little without engagement in this digital day and age that we live in. You could have a 100,000 followers on a social media platform, but if your goal is to sell products and your audience is not engaged, selling is going to be tough. These days you really need a narrative and in order to sell products you need to give the customer a reason to engage with you. Nobody can predict the future, but where opportunities are concerned, perhaps there is merit in a barter agreement with a company who have a platform that can deliver you exposure and engagement to promote your product for free, which in turn leads to sales later on? I think from a birds-eye point-of-view, the question is how can you work with other businesses in such a way that the deal is mutually beneficial for both parties. It may not be about sales up-front or making a lot of money in a short period of time, but it is safe to say that in this new-world of online shopping, your future opportunities and therefore sales will be coming from a different place to where they used to come from in the past. editor@buggreport.com.au

THE BUGG REPORT Managing Director Tony Bugg: tony@buggsolutions.com.au Editor Matthew Bugg: matt@buggsolutions.com.au

Contacts Advertising: bookings@buggreport.com.au Feedback: editor@buggreport.com.au Media: media@buggreport.com.au

Bugg Marketing Solutions Email: info@buggsolutions.com.au | Website: www.buggsolutions.com.au Address: Level 1, 64 Victor Crescent Narre Warren VIC 3805 | Postal: PO BOX 491, Berwick VIC 3806 The Bugg Report has been compiled as a guide to retail, sports, lifestyle, toys, licensing and other related matters. The views and opinions provided are based upon the views and opinions of its writers. In no way is The Bugg Report a factual guide to retail, sports, lifestyle, toys, licensing and other related matters and does not take responsibility for how the information provided is used by its consumers.

Brand Licensing Europe | Edition 25

MOOSE TOYS IS AN AUSTRALIAN SUCCESS STORY We interview Manny Stul to learn about bringing Moose to global stardom

THE OFFICIAL EMOJI® BRAND We interview Marco Hüsges

SESAME WORKSHOP We interview Gisela Abrams

VIMWOOD We interview Kirrin Tilbrook

CENTA IP We interview the new global team running Centa IP

WWW.COSTUMEBOX.COM.AU We interview Nikki & Roma

MJM AUSTRALIA We interview Jacques & Marcel

GROSS EMPIRES We interview Ryan Beaird

DAN AMOS ON GAMING The blurring of two worlds

BRAND LICENSING EUROPE We interview Anna Knight from UBM KELVYN GARDNER The state of licensing in the UK

RETAIL SHIFT Where to for bricks & mortar?

58 HINKLER We interview Stephen Ungar

THE FUTURE OF RETAIL IN AUSTRALIA Some thoughts and observations on retail

SHOWTIME ATTRACTIONS We interview Keith Brown

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MOOSE TOYS AN AUSTRALIAN SUCCESS STORY As part of our exclusive feature interview section in The Bugg Report, we have been fortunate to pose some searching questions to Manny Stul in relation to just how he managed to deliver such an enormous success story.

Australia is a relatively small country and often credited with punching well above its size and weight in the global community. There has been an emerging story in the toy & licensing business, which relates directly to an Australian toy company and its entrepreneurial owner, which clearly demonstrates this sentiment. Moose Toys and Manny Stul have been busily building their business over the past 15 years, where they have navigated many highs and lows and recently they have been rewarded with the global success of their home grown Shopkins concept. Shopkins has grown to become a global phenomenon over the past 18 months and has driven the sales line for Moose beyond a half a billion dollars! Not bad for an Australian toy company who has taken its product portfolio global but remained at home. Shopkins has outshone brands such as Barbie and My Little Pony over recent times and it is testament to the perseverance of Manny and his team to stay the journey in the challenging global marketplace. Manny, many people in the industry who donâ&#x20AC;&#x2122;t know you may assume that Shopkins has been an overnight success. Nothing could be further from the truth I am sure! Can you tell us a little bit about some of the challenges which have confronted you along the way during the Shopkins journey?

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It really is an amazing brand. Four years ago Shopkins launched and completely reinvigorated the collectable category globally, creating mass hysteria as children collected and traded their prized characters. We are just about to go into Season 9 and the brand has transformed from a small collectable toy into a fully-fledged global franchise brand. To date, we have sold over one billion units of Shopkins and have over 300 licensing partners! The biggest hurdle we have had to overcome as a business was pre-Shopkins in 2007 when we had an issue with one of our craft products Bindeez. A factory substituted a chemical without our knowledge and it resulted in a worldwide recall. We worked closely with our distributors to reach agreements that meant we were able to stay operational. It was a very difficult time, especially given that we had to come to 34 individual agreements but in the end we developed even better relationships with our partners due to the way we handled the situation. Those relationships still hold strong today. I understand that you are very passionate about innovation. In an Industry that is often prone to duplication, what is your philosophy in relation to developing product concepts and establishing directions for your company?

I am. Innovation has always been in my blood.Â When I was beginning my career and building my giftware business, innovation was a survival mechanism to ensure my business had a niche and remained relevant. All the lessons I learned through that period I made sure I brought with me to Moose. The most important lesson that I learned was that innovation starts with your people. Your people and your team build your culture.Â And the right people and fit will help breed innovation. We do things differently at Moose. I like to say we have innovation in our DNA. It was important for us to create an environment where our team can use their imagination and we have done this through our creative hub. It gives them freedom to be bold and adventurous with their concept whether they are in product design, marketing or HR. It is also important to stay true to your roots. Being based in Melbourne we have the benefit of being thousands of kilometres away from where most other toy companies are located. This allows us to innovate and create or own intellectual property (IP) without feeling the pressure to follow trends. We ensure that we get the basics right and we do this in parallel to identifying new trends and development opportunities. We know we need to set trends, not follow them, and be agile when needed. We empower our team to back themselves and to set big goals. All of these things are key to fostering an environment of innovation at Moose! The sort of success that Moose has delivered over recent times is often as a result of a team effort. Jacqui and Paul have been with you along the way, how have they contributed to your vision for the business over the years? We are a team and all of us have been invaluable to the success and great culture at Moose. Jacqui has extraordinary talent and intuition with product, and Paul is a force of nature with his drive, charisma and his eye for product. He really drove our success in to the USA market. I also understand that you now have over 350 team members as part of the Moose family. How do you value their contribution to what you have achieved? They are essential! We have worked hard to create a team which values creativity and innovation and this has been one of the key drivers to the success of our business. We take care of our team and work hard to cultivate a relationship of honesty and trust with them. We all work hard and give every task 100%. But it is important that we can support our team with the opportunity to look after themselves and refocus.

We do this via our health and well-being program, free to all staff including: a fully equipped gym, personal training, yoga, ski trips, training programs and much more. We now have teams across Melbourne, Los Angeles, Hong Kong, China, London, Paris and Vietnam, and we now distribute to over 100 countries, which is an amazing achievement. Manny, there has been a lot spoken about your new corporate offices in suburban Melbourne. What did you set out to achieve in the planning stages? We have people from all corners of the globe who come to work with us and we wanted to create an amazing space for them at our HQ Melbourne. Creativity, innovation and fun were top of mind when planning our office space and we are so proud of it! We have a giant tree house in reception, we have half a plane (yes a real plane â&#x20AC;&#x201C; an old DC3) upstairs that the team uses as a skype room and the other half is in the downstairs garden and used as a lunch room (see top right hand side on page 7).

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We feel incredibly lucky that we are based out of Melbourne, Australia. It is one of the key things that makes us different and sets us aside from most other toy companies. What is your over-riding philosophy in terms of making sure that Moose remains at the top of the tree for many years to come? I live the Good to Great principles developed by Jim Collins, as do my leadership team and the wider business. To remain a market leader and continue to innovate, it is absolutely imperative to: • Embody the level five leadership qualities or surround yourself with level five leaders who can prop you up • Focus on having the RIGHT people in the RIGHT seats • Ensure you have disciplined thought and in turn, disciplined action • Focus on what you can be best in the world at It is important for us to continue to embrace the changes in technology and to continue to disrupt and not allow others to gain an edge. Innovation in everything we do is essential to our continued success. From what I read you are also planning to get into the movie business with the release of a Shopkins movie. Can you tell us a little about this? It always made sense for us to transition Shopkins from a toy brand into entertainment. Storytelling is at the heart of how we develop many of our brands. When Shopkins was first released we established the

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characters through webisode shorts on YouTube which gained huge traction and made our fans hungry for more content. Shopkins has now established itself as a fully fledged entertainment franchise! Last October we released our first direct to video movie - Shopkins Chef Club - which ended 2016 as number one new DTV release for families. This September we are launching the follow up - Shopkins World Vacation which we anticipate to be an even stronger property. There is the potential for a movie (well at least an option signed) so we could hint to watch this space for a theatrical movie in the near future? Thoughts? There are many younger executives who are now coming through the Toy Industry. What would your advice be to these budding Entrepreneurs who may consider developing their own success story? Find a niche in the market and do things differently. Find something you love and that you are passionate about. Be ambitious. Think globally. Surround yourself with fantastic people and have the right people in the right seats. Remain disciplined in thought and action and always treat people with honesty and integrity. And finally continue to innovate, it is absolutely imperative to success. You were recently recognized and inducted into the Australian Toy Industry Hall of Fame. What does this accolade mean to you? It is a great honor. The Australian Toy Industry is an incredibly exciting space at the moment and it is very humbling to be recognized by my peers.

We now have teams across Melbourne, Los Angeles, Hong Kong, China, London, Paris and Vietnam, and distribute to over 100 countries which is an amazing achievement.

Manny, how do you see the next three years ahead playing out for Moose? We are very excited about the future at Moose! We are always looking to evolve and the immediate future is no different.Â We are focused on making sure our passion to innovate and be different gains momentum and we keep creating great brands and products which includes exploring new product categories. Increasing our charitable work is also a big focus for us now and into the future. As your product portfolio grows and evolves, do you see any standouts in your range which the market should look out for? At Moose we are known for our disruption in the collectable category. We have just released two new amazing toys that show the evolution of collectable play. Pikmi Pops are miniature plush characters that come in their very own pop vessel â&#x20AC;&#x201C; perfect for unboxing play. And Cutie Cars are quirky, die cast vehicles that each have their own theme. They are defying the notion that die cast cars are just for boys and sales out of the gate have been phenomenal. Finally Oonies. It has been years since a truly unique craft product has been released and disrupted the craft

category but we have created this quirky fun and creative product unlike anything seen before in the craft and activity space. Oonies enables kids to create their own mini balloon like art.

It is clear that Manny and Moose have stuck to their plan along the way. From our research he sights honesty and integrity as some of his secret weapons. These two corner stones have worked for him and helped the company through good and bad times. He encourages all of us to be more innovative and daring when making decisions in business and believes other Australian companies can use this innovation to move onto the world stage. We have been very privileged to gain some insight into the Manny Stul and Moose story. Our congratulations on his recent awards and we wish he and Moose every success in the future.

For more information about Moose Toys visit www.moosetoys.com

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! e r e h w y r e v e , e r e h t , Here

• 700+ Trademarks • 6000+ Copyrights • 350+ Licensee

See you in London!

• 50+ Style Guides

Oct. 10 -12 2017 / BOOTH E70

• Custom Development

www.emoji.com

licensing@emoji.com

FEATURE INTERVIEW WITH MARCO HÜSGES | CEO & FOUNDER OF THE EMOJI COMPANY

Six months on from the Licensing Expo and we are now in London at Brand Licensing Europe. We have witnessed this amazing creation by Marco Hüsges pretty much from the beginning. We have followed his progress and reported on his many successes along the way. The business of licensing is more often than not pigeon holed into various age demographic splits, which limit your market. The amazing thing about the official emoji® brand is that it has no barriers to age demographics and applies to a non-gender specific target audience. Once you apply a sound plan and an owner who is passionate about what he does, no wonder it is so successful. Marco has strategically acquired rights and registered trademarks throughout this journey, which has given him great control over his property. There have been fringe brands in the market over the journey which have looked to commercialise their position, however there is now only one official emoji® brand in the market! Marco already has much of the globe taken care of and before long there will be nowhere you can go without the presence of the official emoji® brand and their products! To demonstrate your incredible growth trajectory, you were active in 60 countries this time last year. How many countries are you active in now? We entered into agreements with licensees from all over the world and cover more than 100 countries by now with our partners. Due to the global popularity of the brand we expect to expand into even more regions over the next month, especially as we signed some global food & beverage agreements which will carry the emoji® brand into the entire world.

Long lasting partnerships with motivated licensees who support the brand are essential. We have signed many renewals in the last few months with partners who started working with the official emoji® brand in 2015/2016. We have had amazing sales results in the categories of apparel, stationary, backpacks and party goods; we have also already signed multiple prolongation agreements for these categories amongst others. The brand has delivered excellent sales results at retail and delivered global proof of concept. Our vast content library that includes 6000+ icons and more than 50 available style-guides enable our licensees to create fresh and appealing product lines for the next seasons. Our unique brand concept offers a year-round potential to our licensees and we are happy to work with partners that share our vision in building brand value and being commercially successful. Both licensees and licensors strive for longevity and for a sustainable business which is something the official emoji® brand guarantees. You were approached by Forbes business magazine in Mexico for an interview and article on your success and business venture. How did this significant accolade make you feel? Making it into the Forbes Magazine of course made us all proud here at the emoji company. When the chance for an interview came up I was honoured to have the opportunity to speak to Forbes. Such global interest does confirm that we must have done something right. The emoji® brand has an extremely broad scope of application which our diverse portfolio of licensees underscores. The brand applies to a global target audience which does attract the media.

And as a testament to the brand and your plan for it, many of the existing deals you secured in the beginning are now up for renewal. I understand that your existing partners are very keen to renew their commitments into the future?

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The luxury of the brand is that there are simply no limits when it comes down to expressing emotions and to share feelings. With the emoji® brand, our licensees experience an emotional and social connection with their consumers which is inevitable in today’s marketplace. Our brand enables companies to address their customers in the most powerful and understandable way. The enduring brand evolution and the endless design options deliver boundless potential to the industry. Most brands have limited target audiences whereas the emoji® brand is a unisex lifestyle brand that targets kids, teenagers and adults. A definite unique selling proposition is the consistent potential versus limited window sales for other brands. Please tell us about your most exciting promotional activation since Licensing Expo in May?

What are some of the more recent categories you have added to your emoji® portfolio? The emoji® brand already covers a huge variety of categories. In the first 6 months of 2017 our global partners submitted around 5000 different SKU’s. Apparel is still taking the lead, followed by food & beverage and promotions. This summer we released several fashion items with ZARA MAN. The expansion potential of the emoji® brand into non-related product categories is huge. We just entered the gambling market and launched an online casino game “emojiplanet™” with Net-Ent while coin operated video machines have been developed and released by Novomatic. You also will see the first emoji® credit cards in several markets soon. We often see brands limited by age demographic; economics and application, because of your brand’s universal appeal there seem to be no barriers?

Promotions are the most effective tool to reach your target audience and to maintain a sustainable growth of your business. We signed around 50 promotional campaigns with licensees such as Pepsico, Danone, Cola Cao or Nestle. This summer we launched a promotion with Nestle Waters in Mexico or with Vinda for tissues in China. Promotions have a significant share in our overall licensing program as they develop an emotional connection between the consumer and the brand which is important for brand loyalty. Marco, how well are you dealing with approvals these days? This part of the licensing structure can often be a barrier to getting product to market? Handling of submissions and approvals indeed is one of the most important aspects in the licensing industry. Time is of the essence with most partners and the emoji company strives to give speedy responses to all its clients and to work closely with them to ensure an uncomplicated and fast approval process. Our in-house approval team will be once more extended in the next months due to the amount of submissions and the overall brand potential. To meet the demand of our licensees we already installed local Approval Managers in key markets such as Mexico.

You also will see the first emoji® credit cards in several markets soon.

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What is your philosophy in relation to managing and controlling growth of the brand? Fast growth is a blessing but of course such growth needs to be managed the right way. We live in a competitive global marketplace and each market approach must be taken step by step. The retail landscape is changing fast and so is the customer. All that needs to be taken into consideration while growing. I believe in proactive management and out of the box thinking combined with a crystal-clear strategy. Our success is the result of heavy investments into brand building, content creation and marketing. Our brand does not depend on a television series or on a movie which is another fundamental unique selling proposition. Our goal is to sustain long term growth for the emojiÂŽÂ brand for decades and we laid out a solid foundation for that.

You will be exhibiting again this year at Brand Licensing Europe in London at Stand #E70. I am sure there will be much more you will be able to announce around your brand during and after the show. We wish you every success and look forward to speaking to you again soon Marco. Thank you! www.emoji.com

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Sesame Workshop FEATURE INTERVIEW WITH GISELA ABRAMS | VP INTERNATIONAL MEDIA BUSINESS, ASIA-PACIFIC

Gisela, it’s been several months since you announced your regional partnership with HeadStart for toys in Australia & New Zealand. Can you provide us with an update on this? It’s been a whirlwind! HeadStart’s Sesame Street plush is now in the market. We have the featured “Tickle Me Elmo” plush, a talking Cookie Monster puppet, character pillows, figurines and so much more! This Christmas fans will see an Elmo, Cookie and Abby talking plush. And we’re thrilled to announce that Sesame Street is the #1 character license in NPD’s plush category, and the fifth best-selling brand in the category overall. In other toy news, we’ve also signed on Toy Lab and MJM! Wow, so your products are doing really well. What about promotional campaigns? With Haven as our licensing rep in the region, they’ve been great partners helping us grow our brand and connecting us with the right partners. Together we are working on an exciting promotional campaign with Big W. Sesame Street does a great job with tackling tough topics. What are you taking on in Australia? To combat the stigma and isolation so often experienced by children with autism and their families, Sesame Street embarked on an initiative called See Amazing in All Children. The initiative is a natural extension of our work around diversity, acceptance, and kindness - and our longstanding message: “We are all different, but the same.” In Australia, we partnered with Aspect, Australia’s largest service provider for people on the autism spectrum, to create See Amazing videos with Elmo and Australian families celebrating how special and amazing each child is. Last year, we conducted a survey on kindness. We chose to shine the spotlight on this topic because we at Sesame Workshop felt that the world seemed to be lacking in empathy, and we were concerned what the long-term impact of that would be on children and society as children grow older. We found that parents and teachers in the United States worry that their children are living in an unkind world; they feel that

people do not go out of their way to help others enough, but they also believe that children need strong social-emotional skills to succeed in life. This year, to combat that negativity, we launched “Spread Kindness, #ShareTheLaughter,” a global multimedia campaign. Fans enjoyed kindness-themed episodes on Sesame Street, as well as new and classic videos and songs celebrating kindness on Sesame Street’s social media channels. On August 16th, Elmo asked friends everywhere to spread kindness around the world through the universal language of laughter with his #ShareTheLaughter tell-a-joke challenge. Australian celebrities who joined the campaign included The Project’s Carrie Bickmore, Peter Helliar and Waleed Aly, Kochie from Sunrise, and the team at Fox FM’s Breakfast show - Fifi Box, Dave Thornton, Brendan Fevola and Byron Cooke. We also have a line-up of international celebrities like John Legend and Kate McKinnon. In the next season of Sesame Street, we’ll be addressing respect and understanding. Next, we’ll also be working on an oral health initiative. We’ll be looking for local partnerships to help develop and deliver content to young children and their families in Australia.

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What are you focusing on at Brand Licensing Europe? We’ve got a great story to tell. On the apparel side, we continued our collaboration with PUMA with a new line of sneakers and outwear for adults. Last year’s PUMA X Sesame Street kids’ collection earned a nomination at this year’s LIMA Awards. H&M’s nine-year collaboration with Sesame Street continues; we also formed a direct-to-retail partnership with Zara. In sleepwear and loungewear, we are collaborating with Alice Vandy on a new collection for teens and adults in the UK. In January 2017, German-owned cleaning manufacturer Kärcher debuted a multi-channel brand campaign that included video spots, point-of-sale materials and behind-the-scenes web videos, starring Cookie Monster. The campaign was active in Germany and across Europe, where the video spots were aired on television and social.

New plush licensees Sambro (pan-European, excluding German-speaking territories) and Nici (Germany, Austria, and Switzerland) will launch their lines this fall. How is Sesame Street’s television presence? We’ve a healthy presence in Europe. Sesame Street returned to the UK in November on preschool channel Cartoonito, marking the first time the show aired in the country since 2001. The Furchester Hotel, another Sesame Workshop property featuring crossover characters Elmo and Cookie Monster, continues to air on CBeebies. With HBO’s launch of HBO España, a subscription-based broadband streaming service that was rolled out in November in partnership with Vodafone, Sesame Street is now available in Spain, too. Our local co-productions, Sesamstrasse in Germany and Sesamstraat in the Netherlands, are also going strong. In Australia, with the ABC as our partner, Sesame Street will air season 48 in the first quarter of 2018. Sesame Street will be celebrating its 50th anniversary in 2019. Anything you can announce? To be sure, it’s an exciting milestone. The festivities will include all-new star-studded TV content, dynamic social media campaigns, interactive consumer experiences, fun new products and so much more. We’re currently working on so many exciting partnerships for our 50th, and are open to additional opportunities and new partners to help us celebrate this very special milestone.

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Brand Licensing Europe | Edition 25

Vimwood LEADING THE FASION ACCESSORIES RACE

Since Licensing Expo, Vimwood has continued to push ahead striving for market leadership in the fashion accessory category. From our earlier conversations we have learnt of their passion for process, quality and innovation, which has stood them in good stead to lead the market. Along with their diverse licensed portfolio including Disney, Warner Bros., Shopkins, Turtles and Trolls, the recent LIMA Global Licensing Survey has the fashion accessory category sitting at number three and growing. It has an 11% market share with only toys and apparel ahead. Vimwood are clearly focused on expansion and we were able to spend some time with Kirrin Tilbrook prior to her making the trip to Brand Licensing Europe in October.

We are still very much a bricks and mortar focused category so rely heavily on our retail partners to be creating an environment that attracts foot traffic into their stores. Our consignment model offers an alternative to retailers to allow us to manage this category for them. We have proven that we are more than capable of generating growth if retailers are willing to give us the space to try! Wonder Women is the first super hero movie with a female lead character. How has your Wonder Woman product performed since the movie launch? It has been great actually! The collection we put together was designed entirely by our team including the packaging styling etc and it was a great success. Warner Bros. were very accommodating in this aspect and it paid off!

Kirrin, from our earlier conversations Vimwood are looking to grow into other markets. What plans do you have for the UK and European markets? We used to supply our accessories to Next and Claire’s in the UK direct out of China and we believe there is still a gap in the European market for the quality of product we offer. Last time we did this, we handled it all from Australia however we would be looking at having someone on the ground in the UK and Europe now to ensure we capitalize on opportunities and are able to meet the retailer’s service expectations. Given that you will be in front of many of the largest brand owners at Brand Licensing Europe, what will be your three most important priorities? Retail distribution opportunities for this market - we offer a high quality product, excellent service at a competitive price. I believe we have a compelling offer in a category that is being under valued. The potential for incremental growth in accessories, particularly children’s accessories, is huge. As the retail landscape continues to evolve and change on a daily basis, where do you see the opportunities for a business such as yours?

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What’s your view on TJ Maxx entering Australia? I visited the store at Top Ryde recently and wasn’t particularly concerned. Competition is healthy! There hasn’t been much noise about them as far as feedback from customers or retailers at this stage. How do you see the mass-market segment panning out over the next 12-months? Hard to say - I feel that there is not enough differentiation in the mass space in Australia to support the number of mass retailers we currently have. I don’t believe consumers are particularly loyal to a retail brand anymore - they are looking for product that either fills a need, is on trend, and at a price that represents good value and I am not sure all our mass retailers can all deliver that well enough to maintain consumer traffic. At the moment it seems that Kmart is setting the standard and direction for retailing in the mass market space, and I’m not sure our market can support this across multiple mass merchants. The fashion accessory market is one of the growth categories and Vimwood have an extensive range on offer. What would you say to potential international retailers who work in this field? Get in touch! In the international markets there is more that could be done in this space and as you say, it is a growth category. We work closely with our retail partners and our end goal is to deliver them with agreed sales and profit results by taking away the pain of a category such as accessories. It is all we do - and when all you do is accessories, you get very good at it! Kirrin, when we last spoke you were launching your new sunglasses ranges, how have these performed for you at retail? Great! We have just launched product into market in September including some new accounts for us which is great. It is certainly a category that we believe has more potential and will be a key focus for us in the next 12-months and beyond.

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How important is the seasonal business for Vimwood and what is your premier event driver? Christmas and Back-to-School are the key event drivers for our business. We do seasonal specific ranges and our busiest period is from October to end February in Australia - October coming into Christmas and then January/February for Back-to-School. Over 50% of our total annual business is generated in these five months with specific seasonal ranging. We are very proud of both our Christmas accessories range offer and our Back-to-School accessories and believe there to be extensive opportunities in these categories internationally as well. Though we still believe there to be more opportunities domestically as well!

Kirrin, we look forward to meeting up with you at Brand Licensing Europe in London this October. It is exciting to see a company like Vimwood looking abroad. The opportunities are many and we can see Vimwood well and truly on the international stage. www.vimwood.com.au

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For Australia and New Zealand: Justin Dery, Coverpoint Marketing • jdery@coverpoint.com.au • +61 2 82032734 For all other territories excluding Asia: Jennifer Coleman, 4K Media • jcoleman@4kmedia.com • +1.212.590.2120

IT’S TIME TO DUEL!

Centa IP CENTA IP QUICKLY HAS AN IMPACT IN OUR INDUSTRY

Norma Rosenhain has been at the forefront of the promotions business for over 30 years and has more recently added the licensing of intellectual property (IP) to her organisation, Centa IP, for films & music; essentially vertically integrating her business. Centa IP is another example of an Australian business taking on the world and achieving amazing results. One of the things that they undertook early on was to put together a really strong team with skill sets to ensure success. Heading up Centa IP globally is Geoff Rosenhain, who has significant cross-category experience. Rebekah Belzer will head up sales and licensing in North America and Nick Cook will head up the UK; both are industry experts. Centa IP has also recently acquired The Fusion Agency, an Australian licensing agency founded by Gail Mitchell following her many years running Hasbro’s licensing business in the Asia-Pacific region; Gail will again focus on the APAC region with Centa IP. As part of this feature we sat down with the Geoff, Rebekah, Nick and Gail prior to Brand Licensing Europe and spoke to them about their plans.

Questions to Rebekah Belzer - VP Sales & Licensing in North America How do you see your business in North America developing? I am very excited to be a part of this new, dynamic agency bringing new properties and brands into the global marketplace. Centa IP is representing some very unique brands that have global appeal and, with our team of industry experts, I know we have the potential for great success! Did your recent activation with Target prove to be a success? The first CP program for Beat Bugs launched this fall at Target in the US. We were so excited to partner with Target as they are fantastic partners. The marketing, media campaign and in-store execution is strong, and we are thrilled to be offering this amazing range of products throughout the upcoming holiday season. These are early days but toys and publishing are our best sellers to date. Can you tell us a little about your Toy partner Hijinx? Hijinx is our Master Toy partner for Beat Bugs. They have developed a dynamic and innovative toy line for the brand, which is now launching in the marketplace. The “Toys Alive” technology that they own offers a unique perspective to how kids interact with toys and media, as this specific range interacts with the music from the show. Its amazing to see the toys sing along with the show. It’s spectacular! Can you tell us a little about your new relationship with My Gym in the US and Canada? Beat Bugs and MyGym ran a fantastic brand partnership which was integrated throughout the entire chain of gyms worldwide this past summer. MyGym participants and their parents were introduced to the property through music, artwork and programming. The Partnership was a massive success and we hope to partner with them again in the future!

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Coming 2018

Coming 2019

Questions to Nick Cook - VP Sales & Licensing in the United Kingdom You have achieved so much already; how do you view your progress? We are about to launch Beat Bugs exclusively with Tesco in the UK. It is incredibly stimulating to be launching a brand-new property with one of the leading UK-based retailers in our first year as Centa IP. We are also launching Kazoops! in 2017 with our Master Toy partner TOMY. We have now been airing (and rating extremely well) on Cbeebies for over a year. It will be great to see product at retail. Exciting times! How did the Tesco activation with Beat Bugs perform? As mentioned, we go to market as this article is published. We will have toys, publishing and apparel in Tesco’s soon, so watch this space! I believe that you will soon introduce Motown into your line up. What’s the background for this property? As Beat Bugs was based on the music made famous by The Beatles, Motown Magic will bring the incredible music from the Motown recording label to a whole new generation of kids – and their parents. These are heart-warming stories whose narrative revolves around the lyrics of famous Motown songs – and we have some amazing talent singing those songs. You will see more in May 2018 on Netflix. Have you been able to place Beat Bugs in other European territories? Beat Bugs airs on Netflix globally and will roll out to FTA and Cable channels from 2018. We expect some more announcements following MIPCOM in October this year.

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Questions to Geoff Rosenhain - Chief Executive Officer Centa IP has already had some significant wins in the market to-date with brands such as Beat Bugs. From your perspective what’s the overriding goal for your business? Our goal is to find like minded brand owners with compelling IP and create exceptional asset value for their business. What will the acquisition of The Fusion Agency bring to your business? Fusion brings to the Centa IP group an award winning executive team, established relationships and a footprint in key markets. They also mirror our culture where we work extremely hard but always find time for a laugh thrown into the mix. How do you want Centa IP to be viewed in the market? That we are straight shooters, strategic thinkers, always working in the best interests of our clients and enjoyable to work with.

Questions to Gail Mitchell - VP Centa IP Asia-Pacific Can you tell us about your progress in the APAC region with Beat Bugs? We are in the unique position of having Beat Bugs on Channel 7, Netflix and also on Nick Jnr. here in Australia. We will launch toys in November and can’t wait to see how those TV ratings we can now quantify via our Nick Jnr audience, are going to translate to our fans here in Australia. We are in discussions for a broader rollout in 2018 but we plan to nurture Beat Bugs. How often do you get the opportunity to work on high quality, award winning TV which incorporates the music made famous by the Beatles? This is a rare opportunity! We have already appointed a number of agents in Asia where Beat Bugs is currently on Netflix. China is a stand-alone market where we have a completely separate TV and Licensing strategy. We are all set down here and looking forward to growing the region over the coming years. Now that you are a key member of the Centa IP team, what’s your view on the next 12 months ahead? Our local retail market is already “interesting” and with Amazon looming on the horizon, I am sure there are going to be a lot of changes. I’m very happy to be part of a global organization which is fleet of foot, entrepreneurial and allows us the freedom to roll with those changes. These are very exciting times. Gail, what markets in the APEC region will you be most focused on in the coming 12 months? Australia and New Zealand are now mature markets for us. We need to maintain and nurture them of course, but our focus is going to be on APAC in terms of TV placement and securing the right sub-agents. Properties which Centa IP has broad territory rights for will be a priority. Beat Bugs is an immediate focus but we also work with Cheeky Little Media on the incredible Kazoops! property which is rating so well on Kids ABC here and we have Motown Magic and Monster Teddies coming up for 2018 and beyond.

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"My kids love this show, they have been laughing and dancing"

. . . .

Just Imagine! Top rating animated preschool TV Series 78 x 7' episodes Global launch June 2016 CBeebies (UK), ABC KIDS (AUS) and NETFLIX (ROW)

"It's marvellous, the songs and music are wonderful" Licensing enquiries please contact Nick Cooke (UK) nick.cooke@centaip.com Rebekah Belzer (North America) rebekah.belzer@centaip.com APAC) Gail Mitchell (ANZ & A gail.mitchell@centaip.com

kazoops.com

/Kazoops

@_Kazoops

kazoops_oďŹ&#x192;cial

INCREASE YOUR GLOBAL NETWORK â&#x2013;ş The Global Trade Association for the Licensing Industry â&#x2014;&#x201E;

LIMA MEMBERS REPRESENT THE GLOBAL SPECTRUM OF LICENSING Expand your business around the world through networking, information and education. To become a member please email LIMA Australia and get started. memberships@licensingaustralia.org

LIMA AUSTRALIA LIMA is an international organization for licensing industry professionals including licensors, agents, licensees, manufacturers, retailers & consultants. LIMA represents the interests of its members by providing the tools necessary to achieve their licensing goals.

Australiaâ&#x20AC;&#x2122;s Leading Retailer of Costumes, Party & Fun We stock over 20,000 different Costumes, Party Supplies and Licensed Novelties Free Next Day Delivery to 96% of Australian Postcodes on Orders $79+ Free 100 Day Returns

CostumeBox COSTUMEBOX ARE A LEADING GLOBAL ONLINE RETAILER BASED IN AUSTRALIA

It was 10 years ago when Nikki Yeaman and Roma Burke commenced a small online costume business in Brookvale up in the north of Sydney. They named it CostumeBox. I met Nikki and Roma way back in 2007 and from the very beginning, they had a passion and dedication for what they had entered into. Nikki and Roma are both from different backgrounds and have different skill sets, however their partnership has always been rock solid. There was little doubt that CostumeBox would one day grow to become the biggest online platform for costumes in Australia! There are not too many businesses that actually plan to grow and then meticulously stick to the plan. They moved into their purpose built headquarters in 2012 and have steadily grown to become the biggest player in their field, offering over 20,000 different costumes, party supplies and fun based products, they regularly dispatch in excess of 5,000 products a day during peak seasonal events. Nikki and Roma have engaged many traditional and non-traditional marketing strategies including PR, radio, on-line chat, billboards and television. They are also assessing the market with the view of possibly offering physical stores. I suspect that their greatest asset has been understanding their customer and then delivering an uncompromising level of service, which provides them with a huge competitive advantage. They have big plans to continue to develop and grow their business over the next three years and we met them recently to discuss the business and their plans for the future. Questions to Nikki... I am interested in how you view the concept of developing an idea such as CostumeBox. To achieve the scale you have been able to achieve in the business, how important was the initial planning and execution component to the end result? Careful and detailed planning has been vital. To achieve our current scale a lot of fairly complex elements have had to come together and work seamlessly. Too often we have been at what our tech people call the “bleeding

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edge” of implementing new technologies, and that’s what it’s felt like! All the greatest ideas in the world are useless without effective execution, and so having a fantastic team around us and never losing sight of our goals has meant we have always eventually achieved the milestones we set for ourselves. You have always pushed the barriers in terms of being ahead of the curve when it comes to developing an inventory system, introducing online chat for your customers and 24-hour delivery models. Have these initiatives fast tracked your growth? Not so much fast tracked as just made it possible to grow at all. The inventory system is key to a stock driven business like ours. Once you can’t count your inventory manually in one day, I think a sophisticated inventory system is essential. Poor stock control could kill a business like ours quite quickly and in a multitude of different ways. In terms of online chat and overnight delivery, we are just always looking for the best outcome for our customers. We take inspiration from leading fashion sites like ASOS, The Iconic and Net-a-Porter as leaders in customer service standards. There has always been a great synergy between you in marketing and Roma handling operational matters. What is the most valuable strength that you each bring to the business and where has that added the greatest value? It’s a situation where the sum of the whole is greater than the sum of the two parts. It’s fortunate that we do have different strengths and work so well as a team. Our goals have always been aligned and I think that is key. From a marketing standpoint, I don’t believe there is anything that you have missed including PR, billboards, television, radio and gift-with-purchase. Can you provide us with a little insight into your next big marketing innovation? We aim to expand CostumeBox to be wherever our customers need us to be, so you could say that real estate is the next aspect of our marketing strategy.

Where do you see online retailing heading in the next three years with the recent changes in this space? I see it all just as retail. I think for most big retail brands it’s no longer a matter of being a website, or mobile site, or bricks and mortar or a social media driven platform anymore. I think good retail in the future must have all those elements working together seamlessly as natural touch points of the retail offering to consumers. I believe you set out to become the best costume and dress up business in the market. As it has turned out your platform has developed to include Costumes, Party and Fun. Can you tell us a little about the Party and Fun part? Sure, it’s all about our customers’ needs and wants. If a little guy or girl (or a big one) is so into Harry Potter that they want a Harry Potter themed party, then as well as buying the costume, it’s going to be very convenient to be able to buy the branded Harry Potter party supplies, as well as a branded gift like a Harry Potter Trivial Pursuit game or Harry Potter Bobble Head as a gift too, and have it delivered all at once for free. We understand you also recently launched an online platform to sell into the United States market. Is this part of your global strategy?

Yes, we do have a US website which is doing well, but we are dipping our toe in gently and are aware that it is a very different market and we have a lot to learn there. The main focus of our growth over the next 3 years is still Australia though. We still see a great-untapped opportunity to better serve Australian consumers. Where do you see CostumeBox in 12-months time? Everywhere!

Questions to Roma... Roma, you are 10 years into your CostumeBox journey. What has the evolving team at CB meant to you both along the way? The team is an integral part of CostumeBox’s success, nobody does this on their own. We are now a group of teams responsible for different functions within the business; each team with their own great team leaders and that has been key to enabling our growth. It has been very rewarding to see many staff develop over the years that they’ve been with us, and to now be able to offer these talented people professional development and a rewarding career path.

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CostumeBox stocks in excess of 20,000 costume, party and fun products. What systems are required to professionally manage such an extensive range? We were early adopters of a very sophisticated enterprise resource platform and that has been key to being able to successfully manage and grow our range. Our system allows us to have real time visibility on our entire inventory and indeed our entire operation. The data we can pull is extremely granular and the historical data is key to accurate forecasting and management. You have invested heavily in customer service and provide a best-in-class experience for your customers. Has this provided you with an advantage in such a competitive marketplace? I think it has. Some of what we class as customer service is simply part of our company architecture. Fast delivery is one of the cornerstones of our model and we are constantly striving to improve our delivery offering. The other aspects of our customer service model are cultural within the company. It sounds trite but the customer is always our primary focus and we put their needs front and centre of all our decision making. Empowering our customer service agents to resolve any customer problem in the first contact is also one of our core service standards. How have you managed your steady growth over the past 10 years at CostumeBox? Well, I don’t mind telling you it has been hard! And as they say “Rome wasn’t built in a day.” I would say it has been a mixture of being willing to take risks, but also put detailed planning and preparation around our plans to mitigate those risks as much as possible. On top of that, I would say tenacity, and bloody hard work has been important. The CostumeBox branding goes right down to your shipping boxes and satchels; do you have a read on the level of recognition for your brand?

“

We aim to expand CostumeBox to be wherever our customers need us to be.

Brand Licensing Europe | Edition 25

Not a scientific one, but we have invested in marketing our brand over the past 10 years and now we feel it is at a stage where we do have a recognisable brand. Anecdotally these days when someone I meet for the first time asks what I do, they always seem to have heard of us, if not bought from us recently. Our original goal for CostumeBox was to be the first company that came to mind when you needed a costume. We do feel we are getting close to reaching that goal. What’s the most challenging task from an operational standpoint to keep the business performing? Recruiting the right team would have to be the most challenging and most important part of operations. Maintaining the quality and quantity of talent needed for an operation like this in the virtually full employment environment we operate in on the Northern Beaches of Sydney is a constant challenge. Also with a business as seasonal as ours, keeping the company culture strong and cohesive with a huge influx of casuals every year is a challenging but rewarding mission. We are lucky to have an amazing team of talented and committed key people but we are always on the look out for the next star. How has your website evolved over time and how do you rate it on a global basis? It’s constantly evolving and we are always looking for ways to improve the customer experience. There would not have been a single month in the past 10 years when we weren’t working on some new feature or improvement to the web or mobile site. We are currently going through total redesign number four, with an entirely new platform, due to be launched early 2018. How efficient is the back end of your webstore? As efficient as the front end, it’s just as important. With out it, we would not be able to fulfill our service promise to our customers. Has the gift-with-purchase platform delivered growth? It’s become a key part of our marketing and conversion strategy and customers react very well to it. It’s important to make sure were offer a quality item and keep it relevant, useful and valuable to the customer.

Thank’s for your insight Nikki & Roma, we appreciate the opportunity to speak to you about your business! www.costumebox.com.au

MJM Australia MJM AUSTRALIA EXCELS IN GAMES, PUZZLES AND STATIONERY

As we observe and deal with the changing face of the global licensing industry, we are able to celebrate the lasting successes of a number of Australian companies. These companies specialise in licensed brands in their chosen product categories and they do an extremely good job at what they do. Along with the re-energising of the games, puzzles and stationery categories around the world, MJM Australia are a stand out success when it comes to realising innovation in these specialised formats. MJM Australia as a collective, celebrated 50 years in the toy business not long ago. This is quite an achievement for a family owned business that has grown from hard work and rock solid relationships in the industry. The business was originally founded by Maurice and Vivienne Levy and was known as Marianne Trading. From the early days of representing Arrow Puzzles out of the United Kingdom, to the more recent times, where they have marketed their own brand Crown Products, MJM Australia have managed to stay in the game for a long period of time. The Bugg Report was able to sit down with Jacques and Marcel Levy leading into Brand Licensing Europe to discuss some of the more important milestones in their business and how they see the future unfolding for licensed merchandise in their categories.

We began by asking them where they see the underlying strengths of MJM Australia and once they had given this some thought, they realised that the two most important assets that they possess are honesty and integrity. They also concluded that their ability to get the job done at all costs has also been a strong contributor to their longevity. The categories that they play in are very competitive and they are also challenging, however their ability to sign the right licenses and then develop innovative bespoke formats for their key customers has provided them with a competitive edge. â&#x20AC;&#x153;I believe that our in-house design studio also has provided us with the ability to take a brief and turn it around quickly. This gives us the ability to get back to our customers and turn an idea into a business proposition, says Jacques.â&#x20AC;? We also asked them to sight some of the highlights along the way and Jacques immediately felt that entering the licensing business way back in 1993 was definitely a highlight for a small company. He went on to say that being able to manage the Disney licenses in their business for over 15 years has certainly been a major highlight. They have enjoyed great success with key brands such as Frozen, Star Wars, Toy Story and Spiderman, just to name a few. We moved on to talk a little about what they felt MJM Australia stood for in this business. They both concluded that the fact that they are a family business, which is founded on respect and caring for one another, is good enough for them. They are conservative in their needs and protect what they have by making smart decisions.

Jacques and Marcel Levy from MJM Australia

The current market conditions in the licensing business are something that affect us all and it is a constant point of contention. Jacques believes that the market is definitely in a state of transition, probably due somewhat to Kmartâ&#x20AC;&#x2122;s decision some years ago to move their model to lowest prices everyday. This indicator is further compounded by the immanent entry into the market of Amazon and Alibaba, which will surely cause changes.

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Jacques notes with interest the recent deal Myer have concluded with Amazon in Australia and Spin Master’s deal with Alibaba in Asia. All of these deals will serve to alter the market in the immediate future. Everybody is talking about Amazon and it’s no secret that Australia has lagged behind the rest of the world when it comes to online shopping. There is no doubt that the Amazon platform will fast track this trend. When consumers can take delivery of goods the same day, it will be a game changer. Incidentally, I did read that last year leading into Christmas in North America close to 47% of toy sales were transacted online! 1 “One of the things that we have spent a great deal of time on is developing and maintaining strong relationships with our retail partners, brand owners and licensing agents. It’s not always about an order; we try and understand from the other side what is important to them and how can we be part of it. Today we enjoy long-standing partnerships with our key customers and are fortunate to work with Disney, Mattel, Hasbro, eOne, WBCP, Haven, Merchantwise ad WP Brands, just to name a few. This has enabled us to make solid plans well into the future, says Jacques.” We next spoke about the international market and its challenges. Jacques believes that outside of the mature United States market and the disruption in the United Kingdom (Brexit) and European markets, that Asia and especially China are obvious destinations for growth and innovative business models. China is currently the second largest economy in the world and therefore the investment in gaining an understanding as to how to navigate it is well worthwhile.

Jacques and Marcel have been business partners for well over 15 years now and when asked, Jacques sites that with Marcel overseeing operations and himself running sales and marketing, thier partnership has worked to their advantage. “We are able to bounce things off each other and generally we come up with a commercially viable solution. We are very different, however having said that it probably plays as one of our strengths, says Jacques.” I concluded by asking Jacques what had he learnt over the past 25 years and he suggested to take nothing for granted and that you must reinvent yourself more often than not to remain viable. It’s great to see that MJM Australia is continuing to grow and evolve with the best licenses in the market. As the games, puzzles and stationery categories continue to grow, you are in a great place to take advantage of this trend.

www.mjm-australia.com

Brand Licensing Europe | Edition 25

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Gross Empires #KEEPITGROSS

The Bugg Report got the chance to chat to Beairdo, the creator of Gross Empires, at Licensing Expo on how the development of the property is going and what the plans are for 2018. So Beairdo, what’s been happening with Gross Empires since Brand Licensing Europe (BLE) 2016?

helps with the animation production side - animators/ writers can revert back to the books and use them as an animation bible. I’m nearly finished with the first draft of the first book ‘The Brothers Rebellion’ and am now writing out the chapter synopsis for the second ‘The Rise of Hermalfius’ and the final in the trilogy ‘The Fall of Vesuvio’.

Hi Buggy, it’s been a great year for Gross Empires. After BLE last year, I went straight off to attend MIPJunior in Cannes, literally as BLE finished I was on a plane heading out to sit in the sunshine on the French Riviera and pitch the property for the first time. It was the first time the networks were going to see the property.

What about publishers for the books, anyone lined-up and onboard yet?

Executives are always interested to see development pitches - properties to keep an eye on. They could see I had a business plan for the brand and that I wanted to make sure the property had a chance to develop a little before going through the commissioning phase.

So what next for the animation?

The pleasant surprise was the look of amazement on their faces when I said it was just me that was working on Gross Empires and what they were looking at was all produced/written and illustrated by me. I also met up with a publisher - we talked about what a Gross Empires book might look like - I hadn’t really thought about the book series for Gross Empires as most of my time was focusing on the animation. So are you now in the process of writing a Gross Empires book then? I’m actually writing three. The books will tell the whole back story to the property and give the fans an understanding of what the property is about - that also

Brand Licensing Europe | Edition 25

All the major publishers are aware I’m writing a trilogy for Gross Empires and I’ll be doing a round of pitching when the first drafts are completed.

I had some great feedback for the 52 x 11 and have decided to concentrate on Gross Empires ‘Minis’ first as it would be cost effective and quicker to make - they will be short form comedic animations around about 30 seconds to a minute in length and released on the Gross Empires social media channels and youtube channel. Early 2018 I’ll be working on these with a freelance animator on board and also the boys from the cast will be performing the VO - Dominic Russell-Smith, Sarmukh Hundal, Rowan Bashetta-Pollitt, Charlie Blythman, William and Thomas Hayward. The boys in the cast have also been producing their own selfiestyle content for Gross Empires which has gone down well with the fans, they have been announcing competitions, comedic videos and shout-outs on the Gross Empires Instagram and musical.ly channels - It’s a great way for me to keep the content moving along and also give them a little more control.

The fans are loving seeing kids their own age as spokesmen or should that be spokesboys for the property. They might even end up as youtube stars for Gross Empires which would be awesome. What about Merchandise? Anything planned? Actually one thing I’m pretty excited about is that after meeting with the Amazon Merch team out at Expo in Vegas I showed them Gross Empires - they were impressed with the property and the fanbase metrics and set me up a Gross Empires official Merch account to sell Gross Empires t-shirts through Amazon in the United States. I just have to design the images, upload the designs and they do the printing and distribution which is a dream - the quality of apparel and print is awesome and plus the royalty rates per unit are the best I’ve seen in the business for print on demand. What about partners? Anyone lined-up? I am delighted to confirm Gross Empires will be represented in BENELUX by BN Licensing for consumer products. I have an enormous amount of respect for David Speijer CEO of BN Licensing and his father Cyril who was inducted into the LIMA Hall of Fame this year. They are perfect ambassadors for the brand and know the cartoon market in BENELUX better than anyone else.

I’m confident Gross Empires will work globally as I can see the fanbase is growing daily and it isn’t just UK kids following on instagram and musical.ly they are from all around the world. On the writing side I’m bringing in a top writer for the TV series and also some freelance storyboard artists and building up the team a bit more for 2018. I’m also working with an EDM producer to create some Gross Empires character anthems so the plan is that each character in Gross Empires will have their own short piece of music. The plan is to put these up on itunes and spotify and when the 52 x 11 goes into production we can use these character anthems in the production - so the plan is to monetise the music before the series even goes into production. The property is now set and the development is now complete so I’m looking forward to launching content globally next year. I think Gross Empires will suit the Australia market so looking forward to chatting with any potential partners down under. --------------------------------------------------------------------For more information about Gross Empires, please contact Ryan Beaird via beairdo@imaginators.tv or visit the website at www.imaginators.tv For licensing enquiries in Benelux please contact BN Licensing via david@bnlicensing.com or visit the website at www.bnlicensing.com

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â&#x20AC;&#x153;We recently engaged Mills Oakley to provide their commercial services in licensing to our organization. Their professional approach and attention to detail has been invaluable to our business.â&#x20AC;? Jonathan Zimbler Zimbler Australia

C OPYRIGHT & WRONG Doing business isn’t always easy, and dealing with creative intellectual property can be even harder. Mills Oakley are experts in all aspects of the intellectual property and technology life cycle. They assist clients to identify, register and commercialise their intellectual property assets and enforce their rights both at home and abroad. As a member of LIMA they understand the complexities of licensing and commercialism. They provide plain English advice and use tables and key point summaries so clients understand their position and can quickly make informed decisions. The Mills Oakley Intellectual Property team provide specialist advice in: • Trade Marks, Designs and Patents (globally) • Social media, eCommerce and domain names • Copyright • Anti-counterfeiting • Privacy, confidential information and FOI • Advertising, marketing & corporate re-branding • Litigation, disputes and oppositions Mills Oakley has offices in Melbourne, Sydney, Brisbane, Canberra and Perth, with over 80 partners and more than 630 staff. For more information on how best to protect your brand or to make an enquiry, contact Stuart Gibson at Mills Oakley today on +61 3 9670 9111 or sgibson@millsoakley.com.au.

Stuart Gibson Partner Corporate Advisory, Intellectual Property

Gaming THE BLURRING OF TWO WORLDS

How the gaming industry is turning to Hollywood to bridge its gap with the entertainment industry... Last month, “Game of Thrones” fans might have been surprised to see Ed Sheeran dressed as a soldier in the opening episode of the latest series. Although the unexpected sighting of the singer serenading the main character Arya Stark in the fantasy drama seemed to thrill most viewers, to some the appearance was out-of-place. With many questioning what purpose the cameo served, it opens up a wider conversation regarding the crossovers that are becoming more and more popular across the entertainment industry - specifically in the gaming world. Every entertainment medium has its well-known stars. In film, people like Jennifer Lawrence and Leonardo DiCaprio own the screens, whilst in gaming, voice actors such as Troy Baker and Jennifer Hale, best known for their incredible voice work in games like The Last of Us and Mass Effect, are distinguished in the industry. But with cameo appearances and guest-starring roles becoming an increasingly popular plot addition, the line that separates these celebrities is beginning to blur. Stars of the screen are beginning to appear in games frequently, with talented actors like Kevin Spacey and Norman Reedus lending both their vocal skills and likeness to games such as the globally renowned Call of Duty and the highly anticipated Death Stranding, begging the question: do they really belong there? With the gaming industry growing faster than ever before, the need to provide complex and interesting plots to entertain hungry fans has opened the door for other celebrities to venture into the digital world. However, as larger budget games like Call of Duty and Halo look to draw in audiences similar to a blockbuster movie, they haven’t just been tied to Hollywood actors. British Formula One driver Lewis Hamilton made his debut appearance last year in Call of Duty: Infinite Warfare, as did UFC’s Connor McGregor. Whilst there is an argument as to whether or not a celebrity belongs in the digital world, by placing a familiar face such as Lewis Hamilton or Ed Sheeran into an environment totally separate to the world in which they dominate, you create links to new audiences and other pop

Brand Licensing Europe | Edition 25

culture spheres. There is a reason for this foray by Hollywood into games. Aside from creating excellent PR for the release of an upcoming game, placing well-known celebrities in the script is equally as important to expand and broaden audiences. Someone that is set to do just that is the man best known as The Doctor. Bringing with him years of on-screen talent, David Tenant has secured a top role in the zombie version of the much-anticipated Call of Duty: WW2 that is set for release later this year. Tenant’s appointment is indeed a clever one – what better way to draw in new audiences than to choose an actor that has one of the largest fan followings from a previous role? In his new role as The Nazi Hunter, Tenant will feel at ease voicing a character much similar to his years as the time lord, and this will in turn

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A larger audience means more possibility to grow the product assortment associated with the game.

allow fans to be much more receptive to the crossover from film and television. Instead of feeling forced and out-of-place, by casting such a recognisable actor to portray a character that is very similar to his previous roles, Activision have done well to create a crossover that has all the signs of being successful. As well as adding credibility however, fans of David Tenant, or more specifically, The Doctor, are likely to follow him across to the new platform of gaming - a sector that they may not have ventured into before thus extending the fan base of both the core game and the consumer products programme that accompanies it. A larger audience means more possibility to grow the product assortment associated with the game. By creating successful crossovers between the two industries, Activision is working towards a world in which there is little difference between a gaming franchise and a film franchise. Interestingly, Call of Duty is well on its way to delivering its own series of blockbuster films, making the crossovers even more important to blur the lines for fans to be able to enjoy the franchise without viewing it as two different forms of entertainment. This will in turn grow the reach of the gaming franchisesâ&#x20AC;&#x2122; consumer products programmes, allowing

the films to support the games and vice versa. It is certainly a challenging task - to merge two industries that have historically been seen as very different experiences will require considerable effort. But the small steps publishers such as Activision are taking by creating clever crossovers could pay off. It might not be too long until it is possible to go to the cinema and watch a compelling storyline unravel for a gaming franchise and then go home and play the game itself. Will we soon see a time whereby all edges of the entertainment industry are blurred? It is entirely possible. ---------------------------------------------------------------------Dan Amos is the Head of New Media at Tinderbox, the digital division of leading global brand extension agency, Beanstalk. For more information visit www.tboxagency.com ---------------------------------------------------------------------To find out more about digital licensing, please stop by the Beanstalk Stand #Q100 at Brand Licensing Europe or learn more about Beanstalk by visiting www.beanstalk.com

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Brand Licensing Europe ANNA KNIGHT TO DELIVER BRAND LICENSING EUROPE IN LONDON

The Bugg Report checked in with Anna Knight, UBM’s new Brand Director for Brand Licensing Europe (BLE), just prior to the show in October 2017. BLE is by the numbers the second largest licensing event in the calendar year. The most significant category of character & entertainment licensing is worth $38 billion in Europe and the show attracts close to 10,000 attendees over three days. Anna has been able to draw from the experiences at Licensing Expo and has been able to incorporate elements and apply them to BLE. Anna, of the 2,500 brands that will be on show here in London, can you give us a snapshot of some of the newest and most interesting additions for this year? It’s so hard to choose, but I’d focus on the new exhibitors this year including some brand new to the show and some brands we’re welcoming back after a few years away. Our new exhibitors include: 24H Le Mans, Admiral Sportswear, by Hartwig Braun, Ashcroft Designs, BroadTeck Co., Ltd, Country Colour, Crazy Bell Agency, DIC 2 Srl, Dicentium Films / Meteoric Entertainment, Ducati, Emoji, Endemol Shine, Hampshire Cultural Trust, Historic Royal Palaces, IHL | INHOLLYWOODLAND, Juventus, Kitkase, KOOKHAK SAEMI INC, Last Lemon, LCT Creative, Level-5 Abby Licensing Link Europe Ltd, Magic Light Pictures, Mandarin Licensing, Markosia Enterprises Ltd, May The Thoughts Be With You, Monika Suska Illustrations, Multera Ltd, Nudinits, Nuttery Entertainment, OpSec Security, POSH Original Art, Rugby World Cup 2019, TF1 Licences, The Gallerie Azerty, The Point 1888, Those Licensing People, Traditional Japan, Tulipop, TY Inc, White Space Entertainment, Striker Entertainment, SYBO Games… We notice with interest that the match making service will once again be available at BLE. Has this proven to be a successful tool for licensing people to seek out meetings and connect with other parties? Absolutely. Hot off the press I can confirm that we have already seen double the confirmed meetings than at the same point last year and we’ve also improved the functionality of the system so both

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licensees and retailers can connect more easily with brand owners and vice versa. Last year, we had over 40% of all attendees engage with the system and so many positive outcomes in terms of meetings and deals, in fact. Can you tell us a little bit about your background and your vision for BLE now and in the future? Of course. I’m a marketer by trade and have been working in events my whole career starting in 2004. I have been running trade shows (in a Show Director role) for three years now and I have to say, without doubt, that licensing is my favourite industry. I’m not just saying that! It’s full of some of the most exciting brands and the most creative and innovative people and you get to be at the forefront of so many consumer trends. My vision for the future is most certainly a focus on European growth - in terms of licensors, licensees and our sought after retailers. Also, I want to ensure that we grow the show in line with the industry and that shouldn’t be at the mercy of any part of the industry - instead working with all corners to find out where to innovate and make changes. This year, we introduced gaming from one of many conversations and I hope to announce next year’s theme shortly. It appears that there will be a major focus on the Gaming category this year, including a keynote from Mark Howsen - Commercial Development Director at Sony. Can you tell us a little about this initiative?

It’s BLE’s responsibility to support all parts of the industry and shine a spotlight on the ones showing growth as well as the ones with opportunity for more licensing. Gaming is one of the highest growing sectors in licensing but it remains largely untapped when it comes to merchandise thanks in part to a lack of understanding about the end user, the products and the potential - we want to educate around the possibilities for licensees and retailers as gaming remains one of the most creative exciting, forwardlooking and lucrative entertainment markets. So we’re introducing educational seminars, a brand new activation and a great line-up of gaming exhibitors. GfK will deliver a seminar on the UK video games industry with an emphasis on the trends and opportunities. This will take place in the Licensing Academy on Tuesday at 11.00. Following this, we have a gaming keynote panel featuring experts from all corners of gaming licensing including Sony Interactive Entertainment Europe & Bioworld International. The new Gaming Activation Area is a showcase and demonstration area, which aims to educate licensees and retailers on the journey of a video game IP from screen to store, including a mock retail environment where a range of IPs will be featured. It’s really exciting not just for the IPs that will be featured but also because it’s the gaming industry working together to showcase its combined potential. Exhibiting this year we have Sony Interactive Entertainment Europe, Ubisoft, Capcom, Sega, King, Activision Blizzard, Rovio, Pokémon, Tinderbox, Animal Jam, Level-5 Abby, Those Licensing People. SYBO Games, Striker Entertainment…

Anna, what will the conferencing program look like this year at BLE for attendees? We’re hosting over 30 sessions across two seminar theatres and the themes covered will range from trend updates on fashion, lifestyle, toys, gaming and sport, to European focused sessions around the impact of Brexit and how to launch a pan European licensing programme. We’ve also got some amazing case studies in our brands & lifestyle theatre including sessions by JELC & The National Gallery, an interview with the V&A, Juventus talking about their recent brand transformation and the return of the hugely popular panel led by Richard Pink that includes speakers from Penguin Random House, Chupa Chups, Smiley & Fat Face. The full programme can be found on our website by visiting us via www.brandlicensing.eu. Can you outline your live stage and product showcase? I believe this is new this year? The live stage is a bit under wraps at the moment but we will be announcing a very special addition to this soon. The product showcase is one of my personal favourites for this year and I strongly encourage EVERYONE to come and visit it. The showcase will highlight the vast diversity and creativity of licensed products targeted toward adults and will feature more than 20 exhibitors that have donated over 150 licensed products representing 60 brands and a host of categories including apparel, health & beauty, food & drink, accessories, giftware, electronics and furniture.

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For example, from the museum/heritage sector, Historic Royal Palaces will showcase items from The Palace Collection with Hobbs, which is launching this fall. Other examples include the Natural History Museum, which has donated a range of greeting cards produced in partnership with Moonpig, as well as V&A and IWM, which have submitted giftware for the Showcase. Large shows can often be difficult to navigate from an attendee’s standpoint. How have you gone about laying out this years show to ensure it can be easily understood? Once again, we have divided the show into zones with Character & Entertainment exhibitors on the lower level and Brands & Lifestyle and Art, Design & Image Exhibitors on the upper level. We have worked hard on our signage to help visitors identify these zones but also identify where to find exhibitors more easily. It’s always difficult to “zone between zones” - as in have a sports zone or heritage zone as exhibitors don’t always wish to be with their counterparts but we often find that that happens naturally regardless. I’d encourage everyone to take a look at the online floorplan before coming to BLE as we have a vast range of exhibitors at the show and it’s essential to a) prebook meetings with matchmaking and b) plan your route to make the most out of those busy days. Anna, what are the three most important aspects of this show that you are focused on developing? There’s no one single thing for me - it’s about the sum of all parts. However, if pushed, I’d say that there are three major threads across this year’s event: 1. Gaming and the potential of gaming within licensing 2. Europe we’ve got more European exhibitors, more European retailers and licensees are registering and we’re really focusing on the “Europe” part of Brand Licensing Europe in our educational content. 3. The continued innovation and versatility of the corporate brands and lifestyle properties, a part of the licensing industry that can sometimes be overlooked vs the ever-popular entertainment space. How have you addressed the fact that the Olympia Hall is on two levels? We continue to work on this, providing better signage, better access (staircases etc) and then also for me, it’s about the offerings on the two floors and ensuring our pre event communications really spell out where

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licensees and retailers should go to find out what they need. The zones help but it’s really the stories from our exhibitors about why their brand and properties are worth visiting that dictate where people go. Next year, we are actually moving the show onto one level, with the upper level coming into the adjacent National Hall. This is the next natural move for us given that we have outgrown our current layout and also, it means that we are well and truly one, cohesive show. We will retain the zones and the Character & Entertainment Zone will stay where it is - Brands & Lifestyle and Art, Design & Image will move next door into National with their own dedicated entrance and three new cafes and new features due to be announced. Now that UBM have 5 shows in their portfolio, can you tell us how you see them providing a connection in licensing around the world? Absolutely. We have four shows with Licensing Expo, Brand Licensing Europe, Licensing Expo Japan and Licensing Expo China as well as our 5th brand, License Global. Not only do we have a presence in the largest and fastest growing licensing markets in the world, but we also now have an opportunity for our customers to do business wherever they need. Wherever your focus - be it domestic Europe or Japan, there is something specific for you and that’s very exciting for us.

Anna, thanks for your time during this busy run up to BLE. It is always valuable to have an insight into what goes into delivering a world-class event. I am sure your attendees this year will benefit from your many new initiatives and come away from the show with greater knowledge of the licensing business.

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Kelvyn Gardner THE “STATE OF THE LICENSING NATION” IN THE UK

As we begin the countdown to October’s Brand Licensing Europe (BLE), what is the ‘state of the licensing nation’ here in the UK? Outside of politics (more on this later) there’s been a good deal to cheer up the country through spring and summer. In sport, women’s teams came to prominence with good performances in football and rugby union, progress for star tennis players and even a world cup win for our cricketers. The men continue to confound in team sports though the cricket team won a series against South Africa. LIMA played its part (ahem) by staging our Licensing Essentials Course and Spring Fling at the end of May in the famous Long Room at Lord’s. Add that to a successful IAAF World Athletics Championships at the 2012 Olympic Stadium and anticipation for England’s rugby League side in this winter’s Aus/NZ World Cup, and the mood has been upbeat. On the surface in licensing, too, all is well. The LIMA Global Licensing Survey for 2016 shows the UK still as the number two market after USA/Canada, with overall sales at retail (US$13,599 bn) up by 4%, on a par with worldwide results. The raw figures mask some major issues, however, which are coming home to roost.

In the natural course of things a huge amount of licensed merchandise sold in the UK is manufactured in Asia and beyond. Toys, apparel, accessories, consumer electronics, sports equipment and many other categories are imported in great volumes. The collapse in the value of £ Sterling after June 2016’s Brexit vote is costing all licensees in this market upwards of 20% of their margin. At the same time consumer incomes continue to be squeezed so that retailers are themselves under pressure to keep prices low, so there’s no comfort there. It’s hard to understand, therefore, why a number of licensors and major agents are pushing for tougher terms - higher royalties, annualised guarantees - just when the licensee community needs support to get through this difficult period. What’s more, there’s really no end in sight: until the outcome of Brexit becomes more clear (and the very earliest that will happen is March 2019, our official ‘departure date’) then the dreaded word ‘uncertainty’ dominates the economic scene. The multiple alternative outcomes of Brexit will, one way or another, affect how license agreements are drafted and how trade between the 28 EU countries will function (customs and tariff implications) and, put simply, right now no one can be sure how this will play out. Great for forward planning, don’t you think? Licensing is doing its best to sail these choppy waters, nonetheless, and BLE 2017 looks set to be the biggest yet in terms of exhibition space and, probably, visitors. Visitor numbers were up 2016 over 2015 at the event itself. At LIMA, we recently analysed attendance at the LIMA BLE Garden Party. For those of you not familiar, this is the biggest social event of BLE at the famous Kensington Roof Gardens, with a sold-out capacity attendance of 500 people in 2015 and 2016. What we found is that 40% of ticket sales for the evening went to non-UK residents, which is yet more proof of BLE’s truly international status in the global licensing business. Licensing events now run from Monday afternoon to Thursday night at BLE, so it’s a big week for licensing here. If you’re coming over for BLE this October we look forward to seeing you there, if not, we’ll promise to drink a beer for you. www.licensing.org/united-kingdom

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Hinkler HINKLER ARE SYNONYMOUS WITH PUBLISHING CRAFT & PUZZLES

For over three generations, the Ungar family has enjoyed a 65-year association with publishing and related industries. It was 24 years ago when they founded Hinkler. Stephen Ungar believed in his ability to steer Hinkler into the future when he bought his father, Robert Ungar, and other equal founding partner Terry Herbert out of the business way back in 2006. A bold move for a young man making his way in life. A year later, Managing Director Nadika Garber bought into the company and the two have successfully led the business from this point on. Stephen’s entrepreneurial strengths sit in innovation and product development. With Nadika running the business’ day-to-day operations, it has allowed Stephen the headspace to further develop the company’s intellectual property. This nimble Melbourne-based company sells 20 million books each year around the world in over 50 countries. Over this period, Hinkler has partnered with Disney, Thomas & Friends, Barbie, PAW Patrol and other licenses and skilfully related these brands to their diverse product ranges. One of the very best strengths and competitive edge for Hinkler has been their ability to develop their own product and then sell it internationally around the world. We checked in with Stephen leading into Brand Licensing Europe in London, to learn a little about his business and his United Kingdom operations.

Having been in the business for over 24 years, what has been the most rewarding aspect of the journey?

How long have you been doing business in the UK for under the Hinkler masthead?

Walking into a store and seeing our products on the shelves is extremely rewarding, but more so when visiting far flung countries, like Iceland and small villages in Wales and coming across foreign language editions of our work. Also, despite being in business for over 24 years, we are still on our journey and continually learn and grow our understanding of the various arenas we play in and related product categories each day.

After failing to sell some of our initial concepts to major publishers in the UK, while on my honeymoon in 2000, we managed to sell to a couple of major retailers directly. These relationships have flourished over the years and grown into a £5 million business today.

Can you tell us a little bit about the development and implementation of your Invisible Ink category?

Innovation, high degree of design, editorial and production values, customisation and speed-tomarket capabilities. This combination has led to our success in the UK market.

The passion for this classic play pattern began when I was a child using the Yes & Know invisible ink books from Lee Publications travelling in the car on family holidays. It’s been quite a journey of trial and error involving various invisible ink formulations however I’m proud to say we now publish the Yes & Know series under license and control various patented invisible ink technologies. Our INKredibles range of products feature the major preschool license brands and after successfully launching in Australia, we are now rolling INKredibles out in Asia, Europe and the UK.

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What does Hinkler bring to the table for UK retailers that sets you apart from your competition?

How do you see the market evolution in the UK and Europe over the next 12 months? Despite Brexit, the UK market continues to grow strongly for Hinkler, albeit with slightly lower margins, with over 15% compound growth in the last three years. This is set to continue next year based on our 2018 forecast. Europe is primarily serviced via a foreign language co-edition model rather than a direct-to-retail strategy and over the past few years has been in decline. However, we are seeing growth in 2018 for the first time in several years.

We believe it’s imperative to develop international markets to strengthen your product development skills, create economies of scale so that you can continue to compete, and diversify sales so that you don’t become reliant on one or two retailers, for which many are now targeting a direct import model. Has licensing added value to your business and product ranges during the Hinkler journey? Without a doubt, licensing has added value to our business. It’s an important part of our product mix and has led to a higher level of customer engagement and provides solutions for key promotional events.

Do you currently work with Amazon in the UK? How do you relate to their distribution model?

What is your view of the concept of owning your own intellectual property?

Amazon in the UK controls over 40% of sales in the book industry and 15% in the toy industry. Hinkler’s categories and business model is strategically aligned to impulse sales via retail however we have strong consistent sales with Amazon UK via our appointed wholesale distributor Bounce Sales and Marketing.

At its core, this is what Hinkler is. We own and control over $25 million worth of copyrights, trademarks, and patents. Owning intellectual property provides the flexibility to innovate quickly, control world rights without worrying about cross-collateralisation of minimum guarantees across territories and provides additional margin which can then be reinvested.

There are now many examples of Australian companies who have taken their businesses abroad. What’s your view on developing the international markets?

Stephen, I have always felt that you have had great passion for your business and what you do. Has this been a strong contributor to your success? Yes, most definitely, but more specifically it’s a passion for the product and key relationships, along with a healthy dose of resilience for the many setbacks; these have all contributed to Hinkler’s success. What’s on the horizon in terms of expansion? Sales of art and craft, stationery, and toys - primarily focused in jigsaws and games - are now over a third of the company’s sales. We see these categories, along with a stable innovative book publishing program, provide a stable platform for future growth.

Stephen it has been good to finally have the opportunity to speak to you about your business and to understand a little bit about what you do overseas. These are challenging times that require constant resetting of all aspects of doing business. It appears that Hinkler are well positioned to achieve more success in the future. www.hinkler.com.au

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ic In Mag

Featuring all of your favourite Disney characters, Hinkler’s INKredibles series for kids are bursting with an awesome range of activities, games, puzzles and illustrations to colour, each with amazing vibrant effects!

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Retail Shift WHERE TO FOR BRICKS AND MORTAR RETAIL IN AUSTRALIA?

For those who sell consumer goods to bricks and mortar (B&M) retailers, it is impossible to escape the reality of a changing landscape not just in Australia, but also around the world. Each market is currently coping with different phases of transition, which include B&M, online, omni-channel and vertically integrated platforms. One thing is clearâ&#x20AC;Ś none of us can ignore the signs at retail. The smart businesses will listen to the market and develop strategies that will allow them to move with this changing retail model. The supply channel will also have to re-calibrate if it is to remain relevant. The bottom-line is that the consumer will continue to purchase goods as they always have, however they will complete these transactions in many different ways. The onus to satisfy this demand is ultimately ours. It remains clear that in the end you will need bothâ&#x20AC;Ś a B&M experience and an online option to remain relevant. Two business models with two different resource platforms taking advantage of B&M stores well positioned around the country.

The numbers and trends point out that Australia probably has slightly more time to figure this out as the eCommerce percentages are smaller here than in many other parts of the world. To understand why is complicated, however it may have something to do with our ageing population and indeed the size of our population. Old habits die-hard as they say! To highlight the dynamics of this dilemma, global retailer Solomon Lew, who owns the Just Group, which includes brands such as Portmanâ&#x20AC;&#x2122;s, Just Jeans, Smiggle and Peter Alexander is currently cautioning property groups to review their rental strategies. If he cannot obtain some relief he may close many of his retail stores! Incidentally Peter Alexander is a growing business as they have figured out that they must offer the consumer a lasting experience if they are to come to their stores. The stakes are high as there are in excess of 140,000 retail businesses in Australia, which employ 1.2 million people. Retail is one of the largest employment categories in the country. It also contributes in excess of $55 billion to our GDP! Kmart figured out a number of years ago that you must stand for something. You must offer the end user a value proposition and a clear message. They halved the number of items on offer, worked out what categories they could compete in, offered a lowest price framework, re-vamped their stores and launched a marketing and television campaign that saw Kmart become the market leader. I suspect that businesses such as Dick Smith, Payless Shoes and Purple Pumpkin, who were all iconic brands here in Australia, went out of business because they became irrelevant to the new consumer who is armed with mobile devices that allow them to access a much wider variety of available offers. ---------------------------------------------------------------------Article written by Tony Bugg tony@buggsolutions.com.au

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The Future of Retail in Australia Some thoughts and observations on retail, where it is heading, the Amazon effect and how things might change in the future. Introduction The opening keynote address at this year’s (2017) Licensing Expo in Las Vegas was by Cole Gahagan from Fanatics, and the key message from the keynote was that retail is changing and rapidly. The keynote was very thought provoking and it raises many questions as to where retail is heading, not just in the United States, but all around the world. If you haven’t watched the keynote, I would really encourage you to check it out because it really is worth the time. If you don’t know who Fanatics are, they are a top 50 Internet Retailer and they sell licensed sports merchandise for brands including National Football League (NFL), National Basketball Association (NBA) and Major League Baseball (MLB). Fanatics understand what fans want and they have adapted their distribution model to supply “on demand” products to fans via the vertically integrated business model and their online retail capabilities. My understanding is that Fanatics have applied an “Uber-like” distribution model to sell their products by making sure fans can get custom gear when they want it, featuring their favourite players, teams and milestones. Where is Retail Heading? It is interesting to examine retail from a birds-eye point-of-view and look at where it is heading and what the future might look like. What used to be a model of “go-to-shop-and-buy-product” has changed on so many different levels, not least because people want custom items and they want them “now.” Products that sell at an “everyday” price-point have also become a high priority for many companies and the ability for the customer to access the product immediately has become paramount. Now more than ever we seem to be in a phase of either adopting a “premium-price”

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strategy or a “high-volume” strategy. We are seeing products sell for less at bricks & mortar retailers because they are on “sale” to compete with online, which is a tough gig when an online retailer can process the order online and ship directly from the warehouse (cue less overheads). The other trend to encourage purchases are “interest free” payment terms; it has really become a fight to get people through the front doors for bricks & mortar retailers. To make matters worse for Australian retailers, Amazon have promised to sell everything at a 30 percent discount, which will surely disrupt many local businesses¹. The Amazon Effect As we all know, Amazon purchased Whole Foods for 13.7 billion dollars which shows just how powerful the online retail giant has become². The question is, what else are Amazon planning to do to achieve world domination in the retail space? Amazon already has $US1 of every $US2 of e-commerce sales in the US and their entry into the Australian market is imminent³. Not only do Amazon have the ability to sell for less and ship to your door, they are set to generate sales of up to $4 billion in Australia when they launch their operations next year⁴. There are now just under 25 million people in Australia and for Amazon to generate $4 billion in retail sales, the difference has to come from somewhere. You would think that acquisitions will take place and there will be less retailers, but the ones that remain will be bigger and more powerful. Amazon has shown us very clearly that the future is moving towards online retail sales and that these powerhouse companies can acquire smaller businesses and simply add them to their offering when there are synergies between the two businesses. The other consideration is that up until now, Australians have not adopted online shopping as quickly as you might think. There was a recent

prediction that the online retail penetration rate will only be 8.4% by 2020⁵. Is that because Australia is geographically so far away from the rest of the world that shipments take longer and customers don’t want to wait? I think it is safe to say that if that is the reason, Amazon will address that when they commence their operations in Australia. There have already been whispers of job advertisements showing up for Dandenong South and the first Amazon retail operations centre to be located in the outer southeastern suburbs of Melbourne⁶. How Will Things Change? To look at retail from a product or service offering, it has become clear that you need a distinct competitive advantage or a unique selling tool to win customers and generate sales. This is now more important than ever and we are regularly seeing “price wars” with many retailers offering the same products at similar prices; hence the always present “on sale” signs that greet us at many retail stores. The issue becomes; how can you change the product or service offering to compete with a retailer like Amazon when they have the scale and ability to sell the same things at a 30% discount directly to the customers front door? It’s a tough question and it seems like it is something that most retailers are struggling to navigate. The obvious thought is to change the distribution model or create strategic partnerships with “services” to provide more value to the customer, perhaps via a subscription service model? Think Amazon and Amazon Prime Video with their original content; Amazon want you to be a part of the Amazon ecosystem and these types of services help them to achieve that. From an overall viewpoint, I think that the future will see that speed, service offering and unique

product offerings will be the keys to retail success. The inclination is that it will become a “you-have-to-findyour-customers” model rather than the traditional model of customers going to retail stores and just browsing. After all, it is much quicker and easier to browse online with your iPhone, right? Conclusion So what does all this mean? It means that regardless of your product or retail platform, engaging the customer is now more important than ever. The internet and the speed in which the world now moves, means that there are more offerings in more places and the key to the puzzle is winning your customers attention, turning that attention into engagement and ultimately turning that engagement into a sale. The world is changing and technology is the driver of these changes in many cases, which makes moving and adapting to these changes quickly so important. Don’t get me wrong, traditional methods still work where they have relevance, but you need to be executing both ways and utilising both the old and the new. So in closing, this is simply my two cents worth and it will be interesting to see how it all plays out over the coming years with the rapid changes that we are seeing at retail, not only in Australia but all around the world. -----------------------------------------------------------------------¹ www.news.com.au ² www.forbes.com ³ www.afr.com ⁴ www.smh.com.au ⁵ www.theaustralian.com.au ⁶ www.smh.com.au

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Showtime Attractions SHOWTIME ATTRACTIONS INNOVATORS IN LIVE ENTERTAINMENT

Keith Brown founded Showtime Attractions in 1995. Keith learnt his trade with the very famous Silvers Circus. From humble beginnings doing face painting and balloon modelling, Showtime Attractions has grown into Australia’s leading event production company. Further evolution was realised in 2012 with the launch of Santa’s Magical Kingdom. This event has also been duplicated in both Sydney and in Perth in 2016. As testament to their innovation they also brought Dinosaurs back to life with Jurassic Creatures and Prehistoric Creatures of the Ice. These largescale ticketed events have seen Showtime Attractions lead the way in live experiences. More recently Keith has formed a partnership with Cathy Skelton to develop and offer a premium promotional service as part of the Showtime offering. We managed to catch up with Keith in between his hectic travelling commitments. We asked him about the Showtime Attractions journey and also about his future plans for the business.

Keith, with such a diverse and demanding business model including live shows, shopping centre events, touring and amusements; how do you prioritise your time across all these responsibilities? Good time management is a result of having a great team at Showtime Attractions. We start with defining what it is we are working on, what is the brief and what division is responsible for each task. We give clear directions and because the team are able to execute so well, time management becomes very manageable for me across all the different responsibilities that I have. One of your biggest recent success stories is Santa’s Magical Kingdom (SMK). Can you tell us a little bit about how this event has evolved? This was initially going to be a two-year development, however the success of SMK has seen us reach the sixth year in 2017 in Victoria. Last year we sold our highest amount of tickets ever to the event and we have had to move from Burnley Oval in Richmond to Caulfield Racecourse to double the size of the event. In terms of the future we have had offers to be broughtout, however we have no intentions of selling the show or stopping it and have just signed a five year partnerships with Crown Casinos. We opened in Crown last year and sold 81,000 tickets and we hope to increase this to 100,000 - 150,000 this year in Perth. We will also be bringing in licensed brands to the show this year including DreamWorks with Trolls as our ambassadors for SMK and Universal will make the Minions part of the show as well.

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Over the past 20 years you have worked with many great global brands. Can you tell us a little about some of the stand out franchises? We love all the projects that we have worked on however in terms of macro level impact on our business, it would have to be when Shrek came to town! It is fair to say that Shrek made Showtime Attractions and I often think we should have painted our building green. In terms of highlights, it is so hard to narrow them down to a few as there are so many and we are currently holding over 50 licenses from Universal, to DreamWorks to ABC and Warner Bros. Keith we understand the Showtime has been responsible for the annual Good Friday Easter Egg Hunt for the past 20 years. Can you tell us how this started and what it has been able to achieve? We are now the longest standing Cadbury supplier, their event and seasonal partner of choice. Cadbury initially came up with the idea of an Easter egg hunt which they ran at FOX Studios in Sydney, something we were not initially involved in. The first year didn’t go according to plan and Cadbury brought us in as the offical event supplier and we have been there ever since. The event has grown from 1,000 to a sold-out 8,000 people since we have been working with Cadbury and we now give away a million Easter eggs every Easter with all profits going to the Children’s Hospital. We’ve also helped to supply over 300 life-sized beds for adults to sleep in overnight with their children which makes us extremely proud. Last year’s show sold out in 14 minutes!

We understand that you have recently formed a partnership with Cathy Skelton to develop and offer a premium promotional program as part of the Showtime Attractions services portfolio. Can you tell us about this venture? Bringing Cathy on board brings over 20 years of experience in the licensing and premium promotional category. This includes sourcing merchandise from overseas, building blue chip brands with blue chip brands, working with licensing, working with major corporate fast moving consumer goods companies, confectionary and quick service restaurants. The goal is to incorporate this with Showtime Attractions and further develop the customer relationships and bring premium promotions to shopping centres including give-aways. We aim to make Showtime Attractions a one-stop-shop for all our clients. We have also learnt that Showtime have been engaged by The Sydney Show to develop â&#x20AC;&#x153;The Circus Comes to Town,â&#x20AC;? can you give us an insight into how you will deliver this activation? After a successful 2017 show, next years show will be run at night time and will run for 12 days. In 2018, Showtime Attractions will partner with The Sydney Show to bring the first street parade to town during the Easter Show. From 4pm each day you will see two parades go through town and we have partnered with a major licensing company so stay tuned for more news on this. The 2018 show will feature real lifesized animated elephants, 10 major circus floats, old-style circus wagons and the main arena will turn into a circus in the evenings. Some other very exciting parts of the show will be the ringmaster announcing the show from a hot air balloon, the trapeze, the motorbikes, and the high-wire! Can you tell us about your international engagements in Malaysia for Showtime Attractions events? We were one of 20 companies to tender for a 60 Years of Independence in Malaysia celebration. Having won the contract we will see Dinosaurs Alive being presented in the City of Kuala Lumpur as a ticketed event. The show has now been extended to August 2018 due to its success so far. We notice that you are very particular as to how you manage the entry to your large live events. Can you tell us your philosophy in relation to how your customer should experience your activations? It really is all about the experience. Retail is in a tough place and our partners want us to bring traffic, that is the main goal. We aim to provide a great experience at an affordable cost, it is also about

engagement and bringing a brand to life for the customer. Ultimately we want the consumer to bring that brand home and remember it because of the experience we provided. The Smurfs Lost Village is another new attraction for Showtime Attractions. Can you outline its main attributes? We currently have a Smurfs Trail going on where you have to collect the stamps which lead you to the Smurfs World. We have pods throughout shopping centres and you also get to go to Summer School with the Smurfs! Westfield Fountain Gate in Melbourne has just engaged us to build the first Smurfs World for this Christmas and you will walk the Smurfs trail to then meet Santa. In 2018 we will be celebrating 60 years of Smurfs and this will include a whole new Smurfs World by Showtime Attractions. Lights by DreamWorks has travelled the world. You have more recently brought this show to The Mornington Peninsula. How did it perform? This event was supported but the Victorian Government as a tourism event which is why it was held at Rosebud. We were concerned about the location at first, however the travel to Rosebud turned out not to be a problem and we had a huge adverting camping to make sure the event was a success. Tourism Victoria also backed the event as the first opening in Australia. The show actually went from Chile to London to Melbourne and now to Crown Casino in Perth. The show also opens again at Watergardens Shopping Centre in Melbourne in September. The show is now booked out until 2018 in shopping centres as well which is great.

Keith after 20 years in this business it is great to have the opportunity to interview you and to talk about Showtime Attractions. Your business has been synonymous within our industry for such a long time. Your enthusiasm and passion for entertainment shines through in everything Showtime Attractions does. www.showtimeattractions.com.au

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