Special Feature - HTI

Both sides now

In March, HTI announced that licensing stalwart Richard Hollis would be taking over the role of licensing manager from Michelle Dalziel, shifting his extensive experience as a licensor, with companies including the BBC and DreamWorks, to the other side of the fence – that of a licensee. Having allowed him to get his feet under the table, Toy World sat down with Richard to find out how the move has been, and how HTI’s licensing strategy continues to evolve with him at the helm.

As shown by the most recent NPD figures, the licensing sector is growing nearly three times as fast as the overall toy market. Classic brands have performed strongly throughout lockdown thanks to an increased numbers of kids watching their favourite shows at home, and as HTI boasts a number of these classics within its portfolio, that strong performance has trickled down. Licensed role-play toys, which form a large proportion of HTI’s toy range, have also been in demand, further driving sales. Considering there was so much uncertainty mid-pandemic about the impact of Covid-19 on the licensing sector, primarily due to its effect on movie release dates and screening options, it’s nice to see that those with a strong presence in preschool licensing are having such a good year.

Before joining HTI, Richard had spent the entirety of his career as a licensor. His move to HTI now sees him on the other side of the table, something he says is fascinating. “You certainly view contractual terms from a different perspective,” he adds, when asked if he now sees things in a different light. “It’s often the same old clauses that get haggled over in licensing agreements. Having spent years arguing one side of the case, I’m now starting to see – and sympathise with – the other side. I’ve long thought that licensing will only work if there’s a proper partnership in place, with each side understanding the needs of the other, and this is perhaps truer now than it’s ever been. You get licensors who fail to appreciate how fast-moving and time critical product development is, something you certainly see much more of on the manufacturing side, and it’s important for them to understand that licensees need room to develop and evolve their ranges. You don’t just want a single product – you want to be able to take it somewhere over the years and build up a range around that licence. Narrow categories and double licensing can really hamper brand development.”

Richard’s experience as a licensor means he’s perfectly placed to guide conversations between parties, while lending his knowledge to his new team means they, too, can benefit from a different perspective. After all, he notes, sometimes all that’s standing in the way of a solution is a simple explanation that his prior roles enable him to offer. HTI’s focus is on working closely with selected licensors to form strong relationships, a strategy Richard references multiple times during our interview. Two-way trust is clearly important to both him and the wider team, and results in partnerships that can be carried from brand to brand, and category to category, while licensors are selected based upon how well they complement HTI’s product focuses.

HTI prides itself on its bespoke product ranges; Richard tells me the company isn’t interested in ‘label slapping’ existing products, an approach that really doesn’t help either party in the agreement. Instead, HTI seeks solutions that meet the core play patterns and themes offered by a particular licence, in categories where it has tangible expertise. The company also works closely with the master toy partners to offer products that will complement those from other companies, a generous and altruistic way of working that, like its bespoke tooling, provides benefits for consumers, suppliers, and licensors alike.

“Role-play is a major category for us, with prams and pushchairs among our leading products,” Richard explains. “We dominate in this space and offer marketleading licences including Chicco, Mamas & Papas, and Joie. It’s a different sort of licensing to what I am used to, but, away from characters, it forms the other half of our licensing portfolio. We’re now looking at how we can introduce more lifestyle brands to this area. HTI wants to become the go-to supplier for the whole role-play category. We’re also exploring and developing every aspect of the category, from plastic to wooden toys, large outdoor kitchens and shops to smaller sets and cases, big-ticket gifting items to pocketmoney and impulse lines. As an expert developer and manufacturer, we want to cover the whole spectrum of role-play toys.”

HTI is also a category leader in licensed vehicles, thanks to its 22-year strong licensing partnership with the world-renowned digger brand JCB, and recently on shored the manufacturing of its Bubblz range, which includes licensed bubbles for Peppa, Hey Duggee and Paw Patrol. The company used to have a much broader variety of licences in its portfolio than it does now, having decided to concentrate its efforts on strong, classic brands going forward. HTI’s approach – trimming back its selection of properties and brands while at the same time pushing each one out into new categories – has resulted in a streamlined but exciting portfolio that offers retailers and licensors a clearer choice of product. Richard says that when he was a licensor at the BBC, he found the sheer breadth of HTI’s product range sometimes made it difficult to identify the optimum solutions. This has completely changed now though; the company is laser-focused on the areas where its expertise can shine through, making it a far more logical choice of toy partner than it arguably used to be.

Retailers, meanwhile, can be assured that HTI’s toys suit each licence down to the ground, and that, being a privately owned family business, the company can act quickly on emerging trends. HTI supplies a variety of retailers, from indies to multiples and grocers, plus everything in-between, with regular new launches supported by strong marketing across social media, influencers and gifting, and product video. This is where Lucy Warren, licensing and marketing executive, comes in. Lucy moved from the marketing side into the licensing side of the business back in April after three years with the company, with Richard as her mentor, meaning she too has an expanded view of the space and HTI’s place within it. As things move forward, she’ll be a key contact for the licensing industry within HTI.

I was keen to find out more about what HTI looks for in a property – and, to a wider extent, in licensors - when considering new deals and partnerships. I put this question to Richard, who replied: “For HTI, properties have to fit into one of our core categories. One of the pitfalls of licensing is people thinking a successful TV show or movie will automatically translate into any product; that slapping a picture of Peppa Pig on something guarantees it’ll sell. We all know that’s not the case. There’s got to be a synergy between the appeal of the property and the appeal of the product. We’ve had great success in this regard; JCB is ideal for our construction range, our nursery brands are ideal for our prams and pushchairs, and Peppa, Paw Patrol and Hey Duggee have translated well into roleplay lines.” Richard continues: “We’re also looking for brands with an understanding of childrens’ lifestyles. When you’re considering new properties, you can somewhat cynically spot if they’ve been designed by an adult with little thought for child appeal. We want creatives and licences that reflect what kids want and understand their development. We’re also seeking long-term brand support across a range of platforms, not just linear TV, from licensors keen to forge strong relationships based on trust, innovation and creativity. Every licensor has a different style or feel, and sometimes that can change within a licence; for example, if a small production company is bought by a big corporate entity and the approach to the licence shifts. The challenge and opportunity on our side lies within understanding and working with licensors in the way they want to be worked with, while also remaining mindful of what HTI needs. From time to time, you come across licensors who are slow to produce contracts or grant approvals, but if you’re aware then you can factor this in. Licensors with multiple contacts can pose some difficulty – a single contact is always easiest - while on the flipside there are some very small licensors that are a little too involved, ones that want to dot every I and cross every T. HTI works mainly with big entertainment licensors – BBC, Hasbro, Nickelodeon – but corporate brands such as JCB, for example, require a different approach. Their top priority is protection of their core business and so licensing needs to complement and enhance their brand. A lot of the success of these relationships rests on making sure they work for everyone.”

Like many other companies, HTI is witnessing the perfect storm created by container shortages, retail caution and staffing/driver issues. Richard says the company is nonetheless weathering them well, maintaining stock availability and customer service, and trading well internationally too thanks to its presence in other markets. The on-shoring of the Bubblz manufacturing, which was completed in Q1, was a timely decision, and HTI may well look to do the same with other manufacturing in the years to come. Richard feels it’s important to challenge the status quo when conditions change, finding new ways of working around and reacting to hurdles as and when they appear. Retailers, he says, also have the opportunity to identify and support new licences, rather than depending solely on the ‘tried and testeds’ of old. HTI is exploring new opportunities in licensing too, welcoming musical toys for Baby Shark to its line-up, while My Little Pony styling heads return to the mix in time for the launch of the new movie. These are great examples of what Richard has touched upon multiple times during this piece – toys that tie-into the core themes and play patterns of a licence. HTI has also taken over the My First JCB range from Golden Bear, bringing the entire JCB licence under one roof for the first time, and is actively looking for new lifestyle licences to ensure its licensing portfolio is kept contemporary and on-trend. Newcomers to the space are also reinvigorating the category and shaking things up; Richard thinks this year’s BLE will be a particularly interesting one, and that the halls will be alive with executives eager to sniff out fresh licensing blood.

Looking to 2022, HTI’s sights are set on building out its ranges, expanding into new areas, and strengthening its international growth. Currently around half its business is international; customers and licensors shouldn’t view the company only as a UK partner. Own-brand lines Evo (scooters) and Teamsterz (die-cast) also continue to go from strength to strength across a number of retailers – and may themselves become licences in their own right.

“We’d argue that we’re the perfect licensing partner within our core categories,” he finishes. “Licensors should definitely be talking to us, if they’re not already.”