Top-Toy, Scandinavia

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Top-Toy is Scandinavia's largest toy retail company. It operates through two chains, Toys R Us and BR Toys, as well as developing and manufacturing a number of its own toy brands. BR Toys is the largest high street toy store in Denmark, Sweden and Norway and is named after the founder, Boerge Rasmussen. In the 1950s Rasmussen set up a news stand in the historic town of Roskilde near Copenhagen. Over the years he expanded his range of goods to include stationery, novelty goods and, eventually, toys. In 1963, when Boerge's sons Bjarne and Henrik Gjoerup joined the company, it was decided that the stationer should become a specialist toy shop. It adopted the founder's initials to become BR Toys.

Initially a new BR Toys store opened each year but growth has been more rapid in recent years and the company now has 170 stores across Scandinavia, which employ 2000 people.

In 1996 Top-Toy became the master franchisee for out-of-town retailer Toys R Us and its annual retail turnover is now E350m. Top-Toy's head office is in Denmark and it is an independent, family-owned limited company run by the managing directors, Henrik and Bjarne Gjoerup.

Top-Toy is distinctive in the world of toy retailing for owning a number of its own toy brands, including Bambino, Food'n'Fun, Play 2 Learn and Flexitrax. These brands are very important to the retailer's ongoing success. Managing director Henrik Gjoerup explains: 'We aim to dominate the market for branded toys and are concentrating heavily on our own brands. At the moment they represent 60% of sales in BR Toys and 40% in Toys R Us but we hope these figures will increase.' Top-Toy adds value to its own-brand products by adapting packaging, translating into local languages and developing completely new toys such as the new Bambino play pen called Babygym.

Toys R Us Scandinavia is a pure toy offering; there is no Babies R Us and it has less strength in electronics and TV than in other territories.

BR stores are, on average, about 3000 square feet so there is little room for creating single-brand boutiques. However at Toys R Us they are an important part of the retail environment, particularly for Top-Toy own brands, major brands such as Disney and Bratz. Bratz is an important property for Top-Toy, as Henrik explains: 'We are the Scandinavian distributor for Bratz which means we control its marketing here. It's amazing how Bratz has captured the Scandinavian market so strongly - Scandinavia now boasts the highest per capita sales of Bratz in the world.' In-store marketing efforts reflect this and BR Toys and Toys R Us stock extensive ranges of licensed products in addition to the toys.

For other licensed properties, Henrik says TV exposure is the most important support, followed by displays and promotions in the stores. Beyblades, for example, have been selling well since the series first appeared on pay-TV and he is gearing up for Care Bears to do the same. 'The toy business is a fashion business. So licensed properties revitalise our stores and our marketing efforts,' he says.

Factors characteristic of the Scandinavian market include the dominance of Lego. The construction toy giant has 10% of the total toy market there. For consumers, there is no equivalent to the Early Learning Centre, or other pre-school toy retailers. The populations of Denmark, Sweden, Norway, Finland and Iceland represent a market of 24m people.

Henrik sees the supermarkets as his most fierce competition. In Denmark there are hardly any other speciality toy stores and four years ago Top-Toy acquired the largest toy chain in Sweden, upping the number of its stores from 20 to 50.

Looking to the future, Henrik hopes the company will expand its retail chains; extend its own-label business and continue to offer better value for money. 'We need our own brands to survive,' he says. 'We have to fight the hypermarkets every day, just as retailers do elsewhere in Europe. We are lucky that BR and Toys R Us are complementary rather than competitive and that we don't have the culture of aggressive price cutting that you find elsewhere.' Having said this, he admits that some hypermarkets had a broad offering and then lowered prices before Christmas last year.

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