Fair play – Irish toy companies are going global
In November 2019, Declan Fahy and his wife Kate Scott traveled to the Dublin Tattoo Convention, intending to get a tattoo.
It was a bit of a midlife crisis moment,” Fahy reflects.
But instead of going home with a tattoo, they walked out of the convention with a business idea.
The couple had spotted a demo at the event for an app called Skin Motion, which lets people select a meaningful audio clip — like the voice of a loved one or a favorite song — and get their faces tattooed. sound waves on their skin so they can play back the clip every time they hold their phone above the tattoo.
Fahy and Scott knew that the type of augmented reality (AR) technology used by the app was popular with their children, then aged six and four, in the form of filters available on Instagram, TikTok and Snapchat.
But they feared that giving them access to these platforms would put their young children “a hair’s breadth away from harmful content”.
The couple realized, however, that there was a market for an AR app to create interactive toys for children and set up HoloToyz, which sells temporary tattoos, stickers, educational books and interactive wall decals that come to life in 3D animation through their own AR. application.
“We found tech developers who own this space in building virtual reality and augmented reality for large corporations, and we approached them with our vision for a kid-safe solution that would be fun and educational,” says Fahy.
In January 2020, Fahy, Scott and their business partner Paul Cosgrave presented their idea at the Spielwarenmesse in Nuremberg, the world’s largest toy fair.
When the event took place virtually the following year, HoloToyz caught Nickelodeon’s attention and struck a deal to make interactive products for Paw Patrol characters. He also creates interactive Sonic the Hedgehog products for Sega.
Within a year of launching the business from their living room in Tara, Co Meath, Fahy and Scott had generated €500,000 in revenue.
Earlier this month, HoloToyz – which won best toy silver this year at the London Toy Fair – revealed it had raised €1m in funding from 14 investors, including the Irish veteran technology John Herlihy and Brian Caulfield of Molten Ventures.
It will use the proceeds to create jobs, develop 50 new products in three months and fuel expansion into new global markets.
HoloToyz products are already distributed in 14 countries and sold in stores such as the FAO Schwarz outlet in Arnotts. The start-up is believed to be in talks with a global toy distributor and Fahy believes this would not have happened had it not been for the presence in Ireland of Smyths Toys, Europe’s largest toy retailer.
“What (Smyths) does for the Irish toy scene is put Ireland on the map because all the major toy companies around the world know who the Smyths are,” he says. “The conversations we’re having with a huge toy company right now are because of their proximity to the toy industry in Ireland through Smyths.”
The same week HoloToyz announced its funding, it was revealed that Smyths – a giant chain of toy supermarkets that started life out of the back of a grocery store in Claremorris in County Mayo – had fought off fierce competition to acquire PicWic Toys, a 45-store chain in France.
Meanwhile, Lego Group, the world’s biggest toymaker, is preparing to open its Irish flagship store on Grafton Street next month.
The experiential outlet will include a permanent display of a Lego replica of the capital’s iconic Poolbeg Towers and a mini-factory which will allow shoppers to design and create their own mini Lego figure.
Lego’s addition to Dublin’s toy retail landscape comes less than three years after US toy chain FAO Schwarz – and the giant piano that featured in the film Big with Tom Hanks – opened a 6,000 square foot boutique in Arnotts. FAO Schwarz was reportedly responsible for an additional 500,000 visits to the Dublin department store between October and December 2019.
Smyths’ continued European expansion, the growth of indigenous toy companies and the arrival of major toy brands such as Lego follow a boom in toy sales during the pandemic as families turned to toys to fill the hours spent at home during confinement.
Companies that struggled mid-decade, including Mattel, rebounded, and in the United States alone, toy retail sales soared to nearly $29 billion ($28.3 billion). euros) in 2021, compared to about 22 billion dollars in 2019, according to the retail information company. NDP Group.
Even Toys ‘R’ Us is making a comeback in the United States, after filing for bankruptcy and closing stores there in 2017 and 2018, with chains in Canada, parts of Europe and Asia finally sold off. third parties such as Smyths.
This week, it was reported that the brand was opening stores at all Macy’s stores in the United States.
Under new ownership of brand management company WHP Global, Toys ‘R’ Us and Macy’s agreed last year to sell toys on Macy’s website and opened stores in some of its stores.
The department store chain says in its first quarter earnings report that its toy sales were 15 times higher than in the comparable period before the partnership.
Even cultural icon Barbie, 56, is having a time: Photos have been released of Margot Robbie and Ryan Gosling skating along Venice Beach in pink and neon suits while filming an upcoming Barbie film directed by Greta Gerwig.
The Barbie The film is one of more than a dozen cinematic projects Mattel is working on, all part of its strategy to transition from a manufacturing company to an IP company that runs franchises.
Other brands headed to the big screen include Thomas the Tank Engine and Pollypocket. Barbie is even influencing fashion with “Barbiecore,” which focuses on the doll’s bright pink hue.
“There are so many licensed products through movies, and companies are capitalizing on intellectual property – the industry is character driven now,” says Fahy.
“Look at the way Barbie has been reinvented. There’s even a CEO, Barbie, who tries to educate girls about the importance of having ambition and advancing in their careers, and that’s not only a matter of fashion.
Retail sales of toys in Ireland were worth an estimated $366 million (359 million euros) in 2020, according to Sharon Keilthy, a former McKinsey & Co management consultant turned founder of eco-toy store Jiminy.ie.
Keilthy projected 2015 estimates for the domestic market based on industry reports.
Most of those sales were likely generated by the family business Smyths, headquartered in Galway.
Its latest acquisition, PicWic Toys, is the perfect fit for its expanding European operations.
The French chain, which was placed in receivership at its own request by the Commercial Court of Lille in May, merged with Toys ‘R’ Us operations in France in 2019 and Smyths already owns the former Toys business ‘R’ Us in Germany, Switzerland and Austria.
Smyths bought 93 stores and four online stores in 2018 from the administrators of the then-bankrupt US retailer.
This purchase allowed Smyths to double in size, giving the Irish retailer enormous clout with the world’s leading toymakers.
The Lille court said it chose Smyths to acquire PicWic Toys this month because it had made the “most attractive and reassuring offer” and had experience in returning to profitability troubled toy stores.
Smyths will hire 632 employees, provide 9 million euros in compensation to creditors and deposit 50 million euros in the French retailer’s current account to fund the relaunch of the business ahead of the upcoming Christmas season.
Smyths already had its war chest for new acquisitions in place when the PicWic Toys opportunity presented itself, having given its continental European business a €175 million capital injection, according to reports in January.
Reports show business leaders said Smyths Toys outlets in Austria and Switzerland were “very successful” after reopening in 2021.
Despite closing its physical stores in 2020 during the pandemic restrictions, Smyths had its busiest year that year as online sales accelerated: it recorded group sales of £1.465 billion. euros in 2020, compared to 1.461 billion euros in 2019. .
One of the Irish toy products stocked in Smyths stores in Ireland and the UK is Arckit, a manufacturer of 3D architectural model kits that has been dubbed “the architect’s Lego”.
It was founded by architect Damien Murtagh, son of Kingspan founder billionaire Eugene Murtagh.
While the initial product was focused on fellow architects, the popularity of the kits quickly spread to hobbyists and children and Murtagh believes the future of Arckit lies in the education sector.
In addition to Smyths, Arckit is stocked at Brown Thomas, FAO Schwarz at Arnotts, the Museum of Modern Art (MoMA) in New York, and has just signed an agreement to test its product in 80 Barnes & Noble bookstores in the United States.
“Everyone is pivoting in different directions and trying to figure out the best place to promote their business and gain sales, and that includes Nordstrom in America, which delivers our product directly – they don’t even buy the product but show it on their website and we ship the order directly to the customers,” says Murtagh.
“About 35% of our sales are online now, up 10 percentage points from last year, and it could increase another 10 points by the end of this year. everything happens.