After the problems at Dreamland, Fun is also looking for a buyer for 24 stores. The toy chain files for bankruptcy and closes its doors for good on Thursday. Are children no longer amazed by the toy store? Retail expert Pierre-Alexandre Billiet explains why the current concept is outdated, but he also sees two strategies to turn the tide.
Fun’s more than 200 employees have been working in uncertainty for three weeks. Three weeks ago, the store chain started a sale in order to continue paying the wages of its staff. The management also announced that Fun is looking for a buyer. She now reports that there are “some serious candidates” with a “very strong interest in taking over 11 to 24 stores”. The candidates also want to continue with the staff of the toy chain, which has 27 stores.
The chain files for bankruptcy. From Thursday, the curators will take over the daily management and communication. The bankruptcy is expected to be declared on Monday. Jörgen Meulders, secretary for ACV Puls, told the unions that staff wages will continue to be paid until Monday. “Fun has taken responsibility in that regard.”
The unions do not know who these discussion partners are. “We hear that there is a serious candidate for 24 stores and part of the head office, but of course we do not know whether the curator will respond to this.”
Consolidation in the market
Pierre-Alexandre Billiet, retail expert at Gondola, does not have a good view of the situation: “I know that many candidates in the broad retail sector have looked at the file, but many have dropped out. That indicates that the cards are really not right. I don’t know who these so-called ‘serious candidates’ are that management is talking about. The fact that the acquirer does not want to continue with all 27 stores probably has to do with the geographical spread of the toy stores.”
If Fun finds a buyer, Billiet expects that this will be the result of a consolidation strategy. Just under a year ago, the Belgian toy chain Toychamp took over part of the Dreamland stores from Colruyt Group. According to Billiet, it is not inconceivable that the Genk toy giant will once again take over. “The toy store market has become one of consolidation as the concept no longer catches on. It is quite possible that Koen Nolmans, the CEO of Toychamp, is among the candidates. Although it is very questionable whether the bank would allow a new takeover to Toychamp so quickly.”
The problem of toy stores
Pierre-Alexandre Billiet notes that toy stores are not only having a hard time in our country. “That phenomenon exists throughout Europe. Toy stores are becoming less and less part of what we see in the retail world customer journey to call. Children come into contact with toys through all kinds of media and through their friends. Parents then order those toys online at an appropriate time, without going to a store. And when it comes to games: they are being downloaded more than ever.”
‘In general, the pursuit of a circular shopping concept is not yet really alive in Flanders. However, it is the only way stores can take a stand against e-commerce’
Pierre-Alexandre Billiet, retailexpert Gondola
The stores offer the customer too few benefits. They must strive for circularity. Customers now simply have no reason to return to the toy store after their purchase, and there is also too little experience. Other types of physical stores, such as second-hand stores, are much better at interacting with the customer. People regularly return to sell old clothes and then browse the store’s offerings. But in general, the pursuit of a circular shopping concept is not yet really alive in Flanders. However, it is the only way stores can take a stand against e-commerce.”
Two strategies
The advantage of consolidation in toy chains is not in the economy of scale, Billiet knows. “But the economy of scale is a means to push the stores towards success again. If a toy store wants to survive, I see two main strategies. The first is focusing on experience. But a small chain can hardly convince a player like Lego to display its latest toys in its stores. This is why economies of scale are important. Toychamp, for example, has understood this very clearly. It uses its large number of stores to convince toy brands to collaborate on experiences.”
“The second way is in specialization. We see that physical stores are doing well in certain toy niches, such as board games. The acquirer could push Fun’s stores towards such a niche.”
Finally, Gondola’s retail expert notes that Fun had long lost its focus. “Over the years, the range has become a kind of shop. It went beyond toys, but there was no clear line anymore. That strategy worked well for years in times when online sales did not exist or were less important. At that time, the store was still the intersection that could lead to several roads, but today the old store concept is completely outdated.”
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2024-02-14 17:34:26
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