Firm’s profits hit by retail woes and collapse of Toys R Us
An Oldham firm which specialises in the children’s toy market has seen its profits and revenues affected by the recent woes in the retail sector.
The Character Group is involved in the design, development and international distribution of toys, games and giftware.
Its ranges include Peppa Pig, Teletubbies and Scooby Doo.
The collapse of Toys R Us and continued uncertainty on the high street led to a fall in profits and revenues.
The firm said revenues fell from £61.5m to £50.5m over the last six months. As a result operating profit was down to £4.6m from £7.2m.
Character said it is adding new ranges, such as the new line up of Pokémon products, to be launched at retail this summer, and a collection of new “hot craze” items, including Soft and Slo memory foam toys, Make your own Slime, Cup Cake Cuties and Mine iT.
It added impulse buying at the right price point is a growing trend and the firm has successfully tapped into this category with new “craze” lines being sourced and introduced regularly.
Character said a number of macro-economic factors have adversely affected the marketplace, which meant the firm’s performance for the half year ended 28 February 2018 has been mixed and reflects the anticipated lower trading levels compared to 2017.
A statement from the firm said: “The first four months sales were in line with our expectations, with UK sales holding up and FOB sales (Free on Board) being lower when compared to the same period in 2017.
“This period included the all-important 2017 Christmas sales, where we successfully focused our domestic sales efforts on absorbing the impact of the failure of Toys R Us in the UK.
“The environment for our FOB sales was more challenging and, in the period under review, the group has been negatively impacted by several global factors, most notably the adverse foreign currency exchange movements in the period and the world-wide restructuring of Toys R Us, which had a direct, adverse impact on all our major international markets.”
The statement added: “Although trading in the first half was lower when compared to 2017, we believe that in view of the sector disruption and upheaval, Character delivered a very solid performance in what has been a very turbulent time at the retail level.
“The calendar year has started very encouragingly, with the established brands and new ranges selling through extremely well at retail.
“We remain of the view that Character will continue to make good progress in meeting the demands of its customers and the consumer and growing the business.
“The Group is looking for a record second half-year for our domestic business in the current financial year and a recovery in our FOB business in the following year.”