Basic Fun! CEO Jay Foreman discusses cross-generational play, differentiation between mass and specialty retail, the importance of licensing, and trends for the future in this extended edition of The Toy Book’s 2023 State of the Industry Q&A roundtable. Want more insight from the all-stars of the toy industry? Click here to explore this year’s lineup!
The Toy Book: How is the “newstalgia” trend powering Basic Fun!’s business in 2023?
Jay Foreman: We continue to introduce new retro items and move some of our retro re-introductions to “newstalgic,” as we’ve done in particular with Lite-Brite. The idea is to keep the “feel good” nostalgia for the toys with adults, but make sure the toy is fresh for today’s kids. The bottom line is that kids really don’t care about nostalgia or anniversaries; they care about and ask for fun toys. We might introduce a nostalgic item with a retro package, but more quickly than ever transition to a contemporary new package design and updated features. We’ll do the same as we bring Littlest Pet Shop back to the market in 2024.
TB: Licensing is an important part of your product mix, but this year it’s evolving. What type of creative collaborations and crossovers can the industry expect to see from Basic Fun! this year?
JF: We’ve leveled up our game when it comes to partnering with brands and influencers that not only tap into topical relevance but also surprise and delight in unexpected aisles. From marrying iconic brands like Lite-Brite and View-Master with Disney 100 to internal brand synergies like Tonka and Lincoln Logs to partnering with top digital creators/influencers like Megan Plays, we’re appealing to both kidults and today’s kids. To that end, you’ll also see unique ways we cross over brands into the toy aisles, like offerings with the No. 1 food and beverage brand, Coca-Cola, as well as innovation with the No. 1 art brand, Crayola. Then, in 2024, you’ll see us re-ignite one of the most successful collectible brands, Littlest Pet Shop, across the world.
TB: Access to hot products at a fair price has been a hot-button issue for independent retailers that lack the buying power of the big-box stores. How is Basic Fun! connecting with and supporting those stores?
JF: The key for specialty retailers is to work even harder to be “special.” Find items that are not easily found in mass or on Amazon. Make your locations attractive and engaging, and work with vendors to create new items in hot ranges that can help them differentiate from mass. We are looking to do more of that, not only for specialty, but for our largest accounts, too. For example, you might see four versions of the same range of Care Bears or Littlest Pet Shop — one for Walmart, one for Target, one for Amazon, and one for our other accounts — giving each a range of similar, but different enough, items for which each can say “only available here.” That will reduce some of the pricing issues we see with the price transparency that the internet provides.
TB: How has inflation affected your business and how are you mitigating cost increases this year?
JF: The big effect of inflation for us has been with transportation costs. Not just from the port in China to the ports in the U.S., but from the U.S. ports to our warehouse and to our customers. Fortunately, the cost of ocean freight has receded to traditional historic levels and even lower. We are still carefully watching inland transport and warehousing costs. Manufacturing costs have stabilized as petroleum prices have also receded, and demand for all but a few elements of manufacturing are plentiful and stable. So from our perspective, we don’t see cost increases affecting pricing for 2023. That’s at least a bit of good news in what looks to be another challenging year.
TB: How does Toy Fair moving from February to September impact your business, and what’s your take on the trade show shift?
JF: Regardless of market gyrations and the “let’s shop early, let’s shop late” push and pull, we view the Toy Fair move to fall as a big positive for us. We will debut our Fall 2024 line behind closed doors at the show. We will promote our current on-shelf ranges out front and in the open, as holiday 2023 will be upon us at showtime. We get a “two-fer” here. From that point, we will still have Hong Kong in January and the spring previews in Los Angeles in April to continue to follow up with customers to close bookings. It’s a big plus not to be in New York City in February when things normalize in the market, as by that point it would be too late to make “go or no go” decisions on new lines.
TB: What are your overall predictions for the state of the toy industry and toy retail this year?
JF: Clearly, this is going to be another tumultuous year. Gross domestic product is predicted to be 1%, so that means chances are most folks won’t grow this year. Retail is still clearly heavy on inventory coming out of 2022, so buyers are tenuous about order placements until they understand when the backlog can be cleared and more comfortable about the state of the consumer. For sure the first half will be tough; however, the backlog will clear. Consumers are working and not worried about losing their jobs (ex-fintech and tech). As they always do, consumers will come out and buy in the back end of the year, and chances are retailers will be chasing goods late. The best advice is to watch your bottom line, plan for flatness, but be ready to pivot as demand returns.