Special Feature - Midco Toys & Learning Express

From Derby to Lake Zurich

Rick Derr of Learning Express and Dave Middleton of Midco Toys have formed quite the friendship. Initially becoming aware of each other via social media, the two toy retailers, located on opposite sides of the Atlantic, have been in touch to find out how their respective experiences and views can benefit both the UK and US toy markets. Toy World caught up with the pair during Dave’s latest trip across the pond to find out what he and Rick have learned from each other.

Toy World first spoke to Rick and Dave back in March 2022, when the two toy retailers sat down over Teams to quiz each other on the differences between their regions. Since then, a fair bit of jet-setting has taken place: Learning Express’ director of Business Development, Mike Derse, came over for the Toymaster 2022 May Show, while Dave, along with Toymaster marketing director Paul Reader, packed his suitcase and headed for Learning Express’ June 2022 conference. You can read all about these trips, and that very first Teams call, in the March, July and August issues of Toy World, all of which feature exclusive articles. Dave went back again in September, this time to stay with Rick and his wife and spend time in the Lake Zurich Learning Express store. (Toy World understands time was also made for sightseeing in Illinois and Wisconsin).

As Rick tells it, his main hope for the relationship between him and Dave – and through a wider lens, between Toymaster and Learning Express – was to share information in a way that would benefit indies both in the UK and the US. He says that one his learnings has been the remarkable similarities between the two markets: he reckons only around 20% of business is done in a different fashion, and that this can be attributed simply to the fact that Toymaster is a buying group, while Learning Express is a franchise model. One of the differences with indies in the US that Rick notes is the ongoing struggle with big-box mentalities at toy companies that only want to deal on an FOB basis, or trade solely with mass retailers.

Dave picks up on this immediately. He says that in the UK indies often feel neglected by certain suppliers – but in the US, indies have a much harder time. “When I spoke to you back in March it was my understanding that the US toy market ran ahead of the UK,” he says. “Actually, that’s not quite the case a lot of the time. There are toys that Rick is only just receiving now that we’ve been selling in the UK for two or three months. I’d say the market is weighted far more towards the UK in terms of seeing or getting new toys first.”

Cepia’s Pop Art Soft, a new collectible plush line of elephants featuring pop-art inspired designs such as Comic Book, Pop Corn or Sugar Skull, is a good example of this. Rick’s Lake Zurich Learning Express store is the first in the world to offer this new range from the company behind Cats vs. Pickles, while Midco Toys will be the first retailer in the UK to stock it – but it was Dave that spotted it first, at a preview in January, while Rick only found out it was available eight months later, in August. It seems like British indies have far more opportunities to spot hot new lines than their American counterparts, and this is something that can (and should) be leveraged as much as possible.

In Rick’s experience, whether a toy shop is ‘mildly or wildly successful’ lies entirely in the owner’s/manager’s hands, not in external factors. In fact, he goes so far as to say that if you don’t believe that to be true, you shouldn’t work in toys. Strong words, but Rick’s shop lies firmly towards the ‘wildly successful’ end of the spectrum, even though he's not presented with many of the same opportunities UK indies are. And although the US specialist retailer market is shrinking, and there’s a lack of younger people coming into the toy industry, Rick is still a firm believer in the power of the independent toy shop and its place in the retail landscape. Dave recounts a conversation he had with a Walmart buyer, who told him they sell 1.4 units of a certain toy per week in one particular store. Dave, meanwhile, sells between 100-200 units a week in just one of his two Midco Toys locations. In other words, some indies are outperforming nationals on certain lines by a very wide margin, and suppliers should take notice. Feedback, too, is likely to be more detailed and useful from an indie compared to a national.

“If you work with us, then there’s a goldmine of data you can tap into,” explains Rick. “Indies can help you learn early on which characters are selling the best, for example, what merchandising is having the greatest effect, how in-store placement is affecting sales and so much more. This allows toy companies to lower their research investment and save on launches. There’s a major opportunity for toy companies to curate launches in carefully chosen indies, regardless of whether that’s in the UK or the US. Just five days into the Pop Art Soft launch, we were able to start feeding back to Cepia a wealth of information which it can then use to ensure this range is as successful as it deserves to be. If a toy range really takes off, we all benefit, so if we work together and use the unique qualities indies bring to the table, all our boats will rise with the tide.”

Dave also highlights that in the US, shopping is much more destination based. His shopping centre-based Derby store has more than 1,000 potential customers walking past it every Saturday, whereas Rick’s Lake Zurich Learning Express is much more rural, surrounded by horse farms and countryside. This is why Rick puts so much time and effort into his social media presence. He has to actively work to pull people out of their homes and to his store.

Another realisation Dave has come to during his time with Rick and the Learning Express group is that Toymaster really is successful at making life easy for its members. Toy World readers should by now be more than aware of the perks offered by Toymaster membership: access to around 160 leading toys and games suppliers, the Toymaster Information Management System (a time- and energy-saving internal portal which manages invoices and payments plus many other features), free branded or generic window displays, and free printed Toymaster catalogues twice a year. Too easy, even? Dave points out that some UK indies with extensive support in place aren’t thinking outside the box anymore. Compare this to indies in the US, which appear to have to work much harder, and far more proactively, to access some of the world’s biggest toy players. Maybe, Dave muses, we need a little more of this get-up-and-go attitude over here. He says: “Learning Express’ attitude towards finding the next big thing, combined with Toymaster’s unparalleled access to suppliers, would turn Toymaster into a world leading group of retailers.”

So, what else have Rick and Dave learned from each other over the past few months? “It is scary how similar we are,” laughs Dave. “Even the layout of Rick’s desk is the same as mine. His process in the morning – coming in, running off the sales from the day before, going through them, seeing what’s selling – exactly mirrors what I do. We format our reports in more or less the same way too. He’s basically my American dad now.”

Dave also tells Toy World that Rick gives far more control to his staff than he does, describing his management approach as somewhat ‘anal’ (his words, not ours). He likes to oversee all the buying at Midco, admittedly because he doesn’t like other people spending his money, whereas Rick is happy to let some of his senior staff make purchasing decisions on their own. While Dave was in the US, he overheard a call between Cepia and one of Rick’s senior staff, whom he describes as very switched on and clued up regarding which of the Pop Art Soft lines were selling the best. The Midco staff would doubtless be capable of handling the same sorts of calls, if Dave were to step back and let them. The same goes for merchandising and dealing with deliveries, which again, Dave prefers to handle himself while Rick adopts a far more laid-back, hands-off approach. (Dave assures us that Rick still works very hard all day, just on other things.)

“I’d urge Dave to develop the confidence and trust I know he has in his staff, because I’ve been through that stage of business myself and I’m better for it,” says Rick. “You’ll wear yourself out unless you bring in a good team and give them the space to grow their skills. Compensate them well, motivate and train them, and they’ll take up some of these finer details for you, giving you the ability to focus on other things.”

Rick, meanwhile, admires Dave’s attitude towards travelling and putting himself out there in new situations. He says the pandemic has left him a little more wary of getting back on planes and visiting busy shows – understandable, given he’s a grandfather – but he is now feeling inspired to once again explore what might be possible, thanks to Dave’s energy and enthusiasm and his zest for retail life.

At the end of our chat, Rick also takes a moment to highlight the role the Toy World team and James Zahn (AKA The Rockfather) of The Toy Book play in keeping the US and UK toy industries connected. He believes communication is key to the continued success of toy retail, hence his keenness to connect with Dave and to bring Toymaster and Learning Express together to swap ideas. Hopefully, as we head into the festive season and another year riddled with uncertainty, that communication will pay off for us all.