Q&A - Rainbow Designs

Over the Rainbow - 50 years of Rainbow Designs

It’s been a big year for Rainbow Designs as the company celebrates its half century. MD Anthony Temple chats to Sam Giltrow about the evergreen appeal of its classic characters and what lies ahead, including global expansion and an even bigger year for Paddington.

“Once you are exposed to the toy industry, it gets into your blood and it never leaves your system.” A bold statement from Rainbow Designs MD Anthony Temple, but one which sums up perfectly why he went full circle in his career and ended up buying a company which features some of the UK’s most cherished brands.

Starting out in the toy industry at Hasbro in 1984, Anthony realised just four years later that corporate life was simply not for him and he moved on to set up a licensing company, DRI Licensing. This evolved into the Design Rights International Group, working on such licences as Forever Friends, Hasbro’s Hero Quest and Bluebird Toys’ Polly Pocket range, to name just a few. It was, he concedes, a big decision, but one that would eventually give him the necessary experience and confidence to acquire Rainbow Designs in 2005. “I ended up back where I wanted to be,” he says. “I don’t think my heart was really in third party licensing, and I was always keen to get back into product development and creativity. The acquisition of Rainbow gave me that opportunity.”

Anthony explained that what brings him pleasure is being able to start something and to still be there when it happens, something which was missing during the days he spent in licensing. Looking back on his achievements since acquiring the company, he says probably his biggest was transforming the business model from that of a distribution company to a creative product development source. Part of that was to set up a strong supply chain, so he went to to factories in the Far East for improved margins and took personal control over the design of the range.

A third component of Anthony’s strategy was to extend and expand the company’s national account and specialist retail portfolio. Prior to the acquisition, Rainbow was very much servicing the independent sector and specialist key accounts. While the company initially focused on retaining those accounts, supplying them with dedicated product lines, it also set up a national account and key account sales force to develop that channel.

“They were all necessary changes as I don’t think the business would have survived in the changing retail landscape,” says Anthony. “We now have an incredibly healthy business in the Grocery sector, with customers such as Tesco, Sainsbury’s and Morrisons. We have also seen the demise of the department store and we lost a lot of customers there, but we’ve actually maintained and grown our business because we opened up the doors of garden centres, which we call the department stores of the future.”

Like many companies, Rainbow Designs has, under Anthony’s tenure, taken advantage of the change in consumer and shopping habits through online growth with Amazon and other retailers, but he says the company has not turned its back on its independents. Indie nursery shops, toy shops and bookshops represent 30% of the company’s business, and they are serviced and supported extremely well. In the past 16 years, Rainbow Designs has seen its customer base grow to more than 1200 in the UK, and the company has plans to expand its offering even further afield.

As Anthony explains: “We have ambitions, and we have some interesting developments in place regarding international business. Pre-Covid, we had taken a serious look at overseas territories and were ready to embark on new markets. Historically, our licences have been limited to the UK, but we’ve now expanded on that and extended territorial rights. We’re now looking at EMEA being a growth area in the next two to three years.”

Rainbow Designs currently has 12 licences of ‘classic characters’ in its stable, including four power brands: Paddington, Peter Rabbit, Disney’s Winnie the Pooh and Guess How Much I Love You from Walker Books. Other licences include The Very Hungry Caterpillar, Spot, Miffy, Snoopy and Elmer. “There’s always room for more, and there’s one in particular that I would love to add to our portfolio, but it is sadly not available to us,” says Anthony.

He describes the plush category, like the rest of the toy industry, as having seen some huge changes over the years. While it is a very visible sector, Anthony believes it is not as big a market it is perceived to be. “The challenge is that the plush market is being characterised by serious devaluation of price points,” he tells Toy World. “Every year for the past 20 years, there has been a decline in the average sale price of a soft toy, yet the flip side of that is that the cost of producing is going up, so margins are being squeezed.”

Sales have, however, remained strong for Rainbow Designs, with business increasing four-fold since Anthony acquired the company. It is, he says, a result of the consistent quality and design of its product. “I think that is something that genuinely defines us,” he explains. “For a company of our size, I think we punch above our weight in terms of sourcing and purchasing capability. Our mantra is ‘quality at affordable prices’. We are also specialists, and being specialists in a small market is a good thing.”

One of the main selling points of Rainbow Designs products is their longevity, and every toy is designed to withstand the test of time and even become a family heirloom. “We always say that we want our products to be ‘forever products’ that won’t get thrown away, and this brings us back to sustainability, as we encourage the pass-on of toys,” said Anthony. In terms of its eco-friendly qualities, he says Rainbow Designs has always been big on sustainability and caring for the environment; in his 16 years in charge this has seen the introduction of recycled stuffing and FSC packing and wood. “We will, however, continue to do more,” he adds.

When looking at new licences to add to the portfolio, Anthony says there has to be a fit with the company’s ‘The Home of Classic Characters’ motto, and he also looks for a long-term partnership that can grow and be developed over many years. “The whole Rainbow business has been built on heritage, long-term collaboration, such as the Paddington brand, which we’ve had for 40 years plus,” reveals Anthony. “To us, loyalty is really important and good relationships are essential.”

So, what new and exciting products can we expect from Rainbow Designs next year? “A lot more of what we already do well,” is Anthony’s reply. “Our major focus next year in the toy industry is Paddington. Paddington is a really exciting opportunity; we call Paddington ‘the bear of many faces.’ It’s a character for all ages, all seasons and all reasons.” The company has always enjoyed fantastic business with the Paddington Classic range, but last year sales were affected by the decline in the number of tourists visiting the UK, which affected a large chunk of retail.

However, Paddington has a new TV series, The New Adventures of Paddington, which has generated more than 6.8m viewers from Nick Jr and Milkshake! With Series 2 now on air, there have also been two major movies, with a new film coming in 2023. This, along with the return of tourists to the UK, has sent the brand trading 30% up, and Paddington will feature heavily at Rainbow Designs’ London Toy Fair showcase. Last year, the company launched collectible figures, collectible soft toys, a mini play set and a Playbus, which was its first major injection moulded plastic product. The team is also in development with two other plastic play set projects which will be major TV lines going into Q3 and Q4 2022. The company is set to launch new Paddington products in the My First and comfort blanket ranges. “It’s a big year for Paddington, in fact we have grand plans for the next five years with the brand,” says Anthony.

Next year also sees the 120th anniversary of Beatrix Potter, which will play into all sectors for Rainbow Designs, primarily in Baby and Nursery but also with TV’s Peter Rabbit on CBeebies. Anthony says the two Peter Rabbit movies have been incredible commercials for the brand, and last year Rainbow Designs created a high-end Signature collection with a new, completely refreshed Once Upon a Time Collection to be launched at London Toy Fair.

Disney’s Winnie the Pooh’s Hundred Acre Wood collection is also trading 30% up and the company recently launched the Winnie the Pooh Always and Forever range, which includes wooden toys and teethers. There will be a continuation of the company’s other brands, which has been pushed back from last year. “This coming year gives us the opportunity to really get behind all our brands, and we are also expanding and diversifying our wooden toy offer,” Anthony tells Toy World. “We are taking a much more serious look at the fit and the complementary aspect of wooden toys to our business, developing brands such as Guess How Much I Love You, The Very Hungry Caterpillar, Elmer and Spot.”

Anthony’s positivity is infectious, and will no doubt stand the company in good stead for another 50 years. “Fifty years is a hell of achievement, but there’s plenty more to come,” he says.