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France’s nascent licensed toy market starts to mature

While toy markets the world over continue to languish, licensed toy sales in France have been growing at a pretty impressive rate lately. According to NPD Eurotoy's Review of Licenses within the Traditional Toy Market, they were up 32% the first three quarters of 2003 versus the same period the previous year - and that's before the all-important Christmas spending rush.
January 1, 2004

While toy markets the world over continue to languish, licensed toy sales in France have been growing at a pretty impressive rate lately. According to NPD Eurotoy’s Review of Licenses within the Traditional Toy Market, they were up 32% the first three quarters of 2003 versus the same period the previous year – and that’s before the all-important Christmas spending rush.

So what has caused the spike? Well, for starters, the Beyblade/Yu-Gi-Oh! tidal wave crashed onto French shores last year, and the two properties triggered 6% of sales from January to October. But the anime-inspired toys’ arrival may have seemed especially spectacular given the fact that the French toy market had been suffering from a pétite malaise for the previous five years. A slow economy and high unemployment, coupled with the absence of any superstar properties, made for a rough few years. Indeed, France’s Toy Fair closed in 1999 due to lack of support and is only now making a comeback.

Whether licensed toy sales will continue to grow is very much up for debate at this point. Ariane Hugon, a researcher in NPD Eurotoy’s market studies department, says Beyblade and Yu-Gi-Oh! sales are starting to cool down, and it’s expected that the licensed toy sales growth will too. Penetration of licensed toys in the French toy market was sitting at 20% in October 2003, and Hugon suggests that figure isn’t likely to increase much in 2004.

But Bernard Russac, marketing director of French toy manufacturer Groupe Berchet, says European toy manufacturers are ‘looking for licenses to differentiate themselves and compete with China.’ His company used to produce toys for Disney and is now looking to brand licenses to help fill that gap. Russac says Berchet has started to see some success with its pint-sized replicas of kitchen appliances based on full-size models by Krupps and Moulinex.

Moreover, there are a few hot properties on the rise that could help counter the inevitable Beyblade/Yu-Gi-Oh! slowdown. Sales of Toronto, Canada-based Nelvana’s preschool property Franklin are up 92% from 2002, and it stood as France’s top plush license in October 2003. But at press time, the predicted holiday showstopper was a line of toys based on the talent-search reality TV series Star Academy.

More than 10 million viewers tuned into French terrestrial broadcaster TF1 to watch the series finale in late December, and the toys are just as hotly sought after. NPD’s Eurotoy puts Star Academy sales up 44% as of October 2003, and Hugon says the line had ‘amazing placement’ at mass and specialty retail this Christmas. Stephane Azoulai, GM of Star Academy master toy licensee Lansay, says the company initially couldn’t keep up with tween girls’ demand for the Star Academy microphone (which launched in early 2003) and had to stop advertising it.

So far, Lansay has sold 160,000 units at US$37 and expects to sell 250,000 in 2004. Additionally, it moved 50,000 units of its less-than-bargain-priced Star Academy karaoke machine (which retails for US$196) and 100,000 of the song disks designed to play in the music machines.

CPLG France managing director Marina Narishkin believes Star Academy’s success and the licensed toy upswing bodes well for the overall French licensing market in 2004 and predicts France has the capacity to grow another 60% in licensing over the next few years. ‘We’re very much behind the U.K. in terms of turnover, and we’re only touching about 40% of business that would be obvious,’ she explains. What will drive growth, says Narishkin, are licensors that are willing to work with licensees – looking for cross promotions and opening up their marketing wallets to really ‘work a property.’

Associate director of French licensing guide Kazachok Sandra Ways’s optimism about French licensing is a little more grounded than Narishkin’s. ‘We think that the market is not mature and is still growing,’ she says. ‘But 60% seems too much. Even if it grows by 10% next year, it’s still very good.’ She says the licensing market, and especially its licensed toy sector, really started to take off about five years ago with the introduction of cable and satellite television.

According to Kazachoc’s 2004 listings, the number of active property licensors and licensees had grown to 1,300 from 961 in 2002. And a recent study conducted by EPM (publisher of trade mag The Licensing Letter) shows that the licensing market in France grew 24% from 1995 to 2001, when it was valued at US$5.2 billion. Ways says the market continued to grow by 20% in 2003 over 2002 figures.

Narishkin, for one, is determined to push the French licensing industry towards continued growth and eventual maturity. She’s working on organizing a French licensing federation that she hopes will be up and running by the spring. ‘It won’t be a cocktail-party operation. There will be lobbying for EU issues, informing people about European law, and talking about the business. We need to work on the potential we have, and the only way to do that is to have business figures, talk to people directly, and raise enough money to advertise our business as a federation.’

About The Author
Lana Castleman is the Editor & Content Director of Kidscreen and oversees all content for Kidscreen magazine, kidscreen.com and related kidscreen events. lcastleman@brunico.com

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