11 minute read
Special Feature - Spin Master
Winning at Spin Master
Spin Master entered 2024 – it’s 30th anniversary year - bolstered by a strong set of Q4 results, which showed that the company’s three ‘creative centres’Entertainment, Toys and Digital Games - are thriving. Following the publication of the results, Toy World’s John Baulch and Rachael Simpson-Jones paid a visit to Spin Master’s UK head office to meet up with Richard Dickson, general manager UK & Ireland, and find out what the year ahead has in store.
Richard describes 2024 as a ‘good year’ for Spin Master – and rightly so. Despite tough conditions across the whole industry, the company pulled off a particularly strong Q4 performance that saw its revenue surge +7.9% to $502.6m, thanks to a whopping +76.9% increase in Entertainment and smaller (but no less important) increases in Toys (+2.5%) and Digital Games (+7.1%).
“We grew in seven out of 10 markets with a particularly strong performance in Europe, and within that region the UK grew its share around 0.2% vs. 2023,” Richard explains, highlighting that against the backdrop of the -5% decrease across the UK Toys & Games market, these figures are even more impressive. He also hails the company’s strong retail relationships for helping Spin Master navigate the challenges that the year presented toy suppliers; a year that, in his words, he was glad to see the back of.
“I won’t lie, I was pretty happy to head off on my Christmas break,” he laughs. “And then of course you come back after the holiday to a blank slate, ready to start over again from fresh.”
This year sees Spin Master celebrate its 30th anniversary, which Richard calls an ‘incredible milestone for the organisation’.
“Our founders, Ronnen Harary, Anton Rabie and Ben Varadi, started the company with their very first product: Earth Buddy,” he explains. “It was quite literally a pantyhose covered head filled with grass seed that would sprout, ultimately propelling Spin Master into the toy industry.”
Today, Spin Master is a leading global children’s entertainment company creating exceptional play experiences across its three creative centres: Toys, Entertainment and Digital Games. Known for its innovation in toys, with award-winning brands like Paw Patrol and Hatchimals, the company is also a producer of multiplatform entertainment content on big screens and small screens spanning linear, free-to-air, streaming and feature films, and creates open-ended digital play experiences for kids and their families.
Richard adds: “What better way to celebrate this milestone year than by continuing to reimagine everyday play, invigorated by a transformative acquisition, the strength of our core brands and franchises and the rich opportunities offered by our new IP.”
When assessing how Q1 has been, Richard says there are two ways to look at any business: from the outside looking in, leaning on data from the likes of Circana, for example, and from the inside looking out. While consumer spending is still squeezed, the company has a raft of new launches banked for the second half of the year which he feels will drive things forward. Drawing on 2023’s Bitzee as an example, Richard highlights just how deeply consumers crave groundbreaking and innovative launches that offer something completely new, even when money is tight.
He says: “Consumers are still seeking both newness and hot toys, but they’re also looking for every day, core brands that resonate with them, particularly in Pre-School – we see this with Paw Patrol. The variety of brands we have — evergreen franchises like Paw Patrol, innovative new IP like Bitzee and a strong portfolio of licensed brands including Monster Jam and Gabby’s Dollhouse — allows us to hit every mark. In terms of the money consumers have to spend, we know they’re facing continued economic pressure. We could pontificate all day about the specific reasons behind the shift in consumer behaviour, but at the end of the day, if we make our products hot, bring absolute newness to the market, and introduce fresh themes and amazing content, we’ll stay relevant, appeal to kids as well as parents, and keep winning.”
Spin Master has long been focused on innovation and the past few years have witnessed the company scale up its efforts in this regard (very successfully, one might add). As is so often the case at this time of year, many of Spin Master’s second half launches are still under embargoRichard literally swivels in his chair as he points around the showroom we’re sat in, rattling off embargo after embargo - though retailers who saw the company’s stand at London Toy Fair or Spielwarenmesse 2024 will be aware of most of them. Happily, we are allowed to talk about the brand Richard is most excited about – Unicorn Academy.
For those that don’t already know about it, a brief recap. Unicorn Academy is the largest IP launch in Spin Master’s history and premiered on Netflix in November 2023 with a 72-minute movie and eight 22-minute episodes. The series is adapted from The New York Times best-selling book series by Julie Sykes and follows the adventures of Sophia Mendoza and the rest of the Unicorn Academy class as they attempt to bond with a unicorn to unlock their magical powers.
“I’ve been on a real journey throughout my 11 or 12 years at Spin Master,” Richard enthuses. “Being part of the team that launched Paw Patrol was amazing, and I see Unicorn Academy as the next big moment. We’ve put a huge amount of investment behind it plus all our learnings gleaned from across the years – this is where we bring all of it to bear and deliver something, in partnership with Netflix, that we believe is absolutely amazing. In fact, I haven’t seen this much anticipation and buy-in from the trade on a new property for quite some time.”
Unicorn Academy quickly soared to the top spot on Netflix after landing on the platform. A toy line (comprising plush, dolls, and figures with light & sound features in a range of sizes), and a licensed consumer products programme spanning fashion, beauty and accessories will roll out from summer, with a digital game also in the works. All will be supported with marketing across social media, TV, out-of-home, influencers and more. Interestingly, Richard feels the show appeals to both boys and girls: he says his six-year-old son and ten-year old daughter both really enjoy Unicorn Academy. His son particularly connects with Rory Carmichael, who’s billed as a ‘funloving prankster goofball’.
The toy range has been developed to offer a range of price points, starting from entry level products that will get the brand into consumers’ hands as quickly as possible. Currently available to stream on Netflix, much of the content is also on the Unicorn Academy YouTube channel, which currently has 123,000 subscribers: the feature-length opener, split into two parts on the platform, has racked up in excess of 15m views. New content will continue rolling out to keep kids engaged in the adventures of Sophia and her unicorn Wildstar, as well as the other Unicorn Academy students.
“While it can be difficult to avoid cannibalisation altogether when you’ve got a portfolio like ours, Unicorn Academy fits really nicely into the Spin Master landscape as it skews older than the likes of Gabby’s Dollhouse, for example, which is very much a pre-school property,” Richard notes. “We’ve got clear segmentation between who and what we’re targeting with all our brands, and we’re strategic in categorising our products even though we have a presence across a vast proportion of the toy industry.”
Away from Unicorn Academy, Richard is also very pleased with the early reads on Rubble & Crew, a spin-off Paw Patrol series. Viewership shows the property is currently overachieving in Europe, especially in France, and the toy range is tipped to bring even more innovation to the Paw universe. The USP of Rubble & Crew is that it skews even younger than Paw Patrol, and thus recruits viewers who can then move into Paw when they’re ready.
“Spin Master and Melissa & Doug have a very similar set of culture and values –we both care deeply about producing great products for our consumers- which is what we were really looking for when we set out to buy a company,” he says. “Melissa & Doug’s complementary product line further bolsters our position in early childhood play, with opportunity to unlock further growth leveraging the size and scale of Spin Master, and the contacts and partners we have in the industry to make the most of what the acquisition can mean for our business. I can’t wait to get my hands on it properly, but I guess I just have to be patient!”
Spin Master’s retail partnerships span a wide range of different channels, giving plenty of scope for the rapid, wide dissemination of products to consumers. Discount retailers such as B&M and Home Bargains are appealing strongly to price- and spending-conscious consumers looking for additional value for money right now, but toy specialists are obviously a vital part of the picture too, from the likes of The Entertainer and Smyths down to the UK & Ireland’s passionate indies. For Richard, supporting indies – whom he calls the ‘bedrock of the toy industry’- is a non-negotiable part of his job.
“When I started this role, I knew immediately that I needed to work out what our indie retail partners need and how we can better serve them,” he says. “To this day, that is something I live by, and from speaking with Toymaster I feel we’re getting it right. Right isn’t perfect though, and we can always do better. One of the biggest things for us is making sure our indies get stock when they need it. A lot of big companies will put indies to the back of the queue when prioritising allocations, but we place them at the front. After servicing them, you’re still left with a really good amount of stock to go out to everyone else – and the indies appreciate it and work really hard to elevate your products, just as they did on Bitzee last year. Of course, if our indie friends think we are missing the mark, I genuinely want to know about it so we can rectify things.”
Support also comes in the form of impactful marketing that brings Spin Master’s brand and products to life at retail. The company has placed generous spend behind its store-level trade marketing assets, from FSDUs to POS and sampling – whatever stockists need.
The Entertainer’s recently expanded partnership with Tesco, which will see The Entertainer Toy Shop arrive in 853 Tesco locations around the UK, has been a major talking point within the industry for the past few weeks. We asked Richard, while on the topic of retail partnerships, how he expects the tie-up to impact Spin Master. It’s fair to say he seems optimistic, telling us: “We’ve always had a strong relationship with The Entertainer, and I don’t see that relationship getting anything but stronger. I’m certainly looking at this as an opportunity for growth, and we’ll be working closely with the team at The Entertainer to maximise fully on what the expanded partnership with Tesco presents.”
While Spin Master clearly has a lot to look forward to this year, persistent macroeconomic factors will continue to pose a challenge for all in the industry. Richard’s feelings appear broadly in-line with the general consensus – that this year isn’t going to witness a dramatic improvement in the cost of living or inflation. Spin Master therefore needs to plan carefully and be as competitive on price as possible, while still moving the dial on innovation and major new brands.
“Innovation is coming, I promise you it’s right around the corner,” Richard finishes, as we prepare to dig into the generous lunch the team has laid on for us. “My best advice is to get ready for it because this year sees some really massive development within our offering - and as it marks our 30th anniversary, it’s an especially exciting year too.”
