What lies ahead
Posted: 29 June 2015, Posted in general
These are interesting times for venerable puzzles and games distributor Crown & Andrews. Say hello to new owners Goliath Games, new general manager Andrew Lee, and new ventures for Gerry Crown and Audrey New. Fiona Cameron reports.
The news that Australian toy industry fixture Crown & Andrews had been bought by powerhouse European distributor Goliath Games was an announcement few could truthfully say they saw coming. Now the
shock has worn off and pulses are back to their resting rate, Goliath’s self-described “strategic investment” is looking like a good fit, particularly in light of the company’s current program of acquisition and expansion.
Goliath Games’ number two, Jochanan Golad, says he can thank the longevity of his father and company founder Adi Golad’s relationship with managing director Gerry Crown and sales director Audrey New for the natural progression to discussions about the purchase of the business.
“In the beginning of the business, my parents were living on my mother’s salary as a nurse, and for nine years they sold only Rummikub,” Golad recalls.
“But they generated so much consumer demand that in 1986 – after persevering for three years – they sold 600,000 pieces in Holland alone. That’s a gigantic number that hasn’t been topped since, and that was the foundation of the company.
“The second country they distributed to was Belgium, and the second game they took on was Tri-ominos, from Pressman in the US. In France, Tri-ominos is the big game brand in just about every household.
“In the ‘90s my parents opened an office in France and slowly built the business and kept expanding,” he tells.
“About 15 years ago we opened an office in Spain, 10 years ago in Germany, seven years ago in the US, and three years ago in Canada. Last year was a busy year for us – we opened an office in Poland, bought Pressman Games – a 93-year-old company, and also bought Crown & Andrews. As an independent distributor with a great reputation, and one that also sells Rummikub and Tri-ominos, Crown & Andrews is a very natural fit for us.”
Golad says Goliath’s management structure is very hands-off, where its territory general managers have a lot of freedom to act within their market.
“At the end of the day they report to my father and I, so if they feel strongly about something we let them do what they feel is right,” he says.
“So we let Australians deal with Australians, the French deal with the French and so on, and that seems to be working well for us.
“The business is up 35 per cent since we took over, which is a combination of a few things: new products [from Goliath]; more investment in TV and marketing: and in general, a very positive attitude from customers after the acquisition. Over the past 35 years Goliath has built a reputation in the industry that when we say we will do something, we do it.
“The Australian business is up and we are anticipating a growth of more than fifty percent in the next couple of years.” Under the terms negotiated at the time of the sale, the business has continued to operate from its Sydney premises with Crown remaining as CEO and New continuing in her role as sales and marketing director for 12 months while looking for “an ambitious general manager”.
The man hired to ensure the continuity and growth of one of Australia’s most prestigious and best-known toy and game companies is former MegaBrands general manager Andrew Lee, who picked up the reins on 1 January.
New says Lee has been charged with improving the company’s turnover, with the decision-making freedom and the finance to do it. One of the holdovers of the strategic restructuring that was put in place following the loss of ranging from a major retail chain is the company’s current low staffing levels.
“We went lean and mean; we capped or cut down salaries, reduced working hours, reassessed our stock levels and we survived. It was the right thing to do. The next year when they weren’t buying from us, we managed to have a better year than we did when they were sourcing product from us. But with expansion and growth comes a greater investment in staff and resources.”
Lee says the company has a one-, three-, and five-year plan it will build towards. “Last year the company had a fabulous year, up 35 per cent on the same structure and staff levels,” he says. “This year is looking really good, but you can’t keep growing without the planned resources and structures in place to do so. Otherwise you start letting your customers down and you don’t have a business.
“Goliath has bought a very profitable, established business which has great brands
in the Australian market, so it’s not so much about integrating Goliath product as it is about selecting items that are right for this market. “Crown & Andrews is famous for being a board game and puzzle business, so for us to get some growth we need to start looking at categories outside board games and puzzles. “Interestingly, that is something Goliath is also doing. For example there’s the RC dragon it is bringing to the market, and there’s a rocket- fishing rod coming. These are things Goliath is doing that are their own IP and outside of their traditional categories.”
At the end of June Gerry Crown and Audrey New will continue to be involved in Crown & Andrews/Goliath, with Gerry moving to the role of chairman, and Audrey to oversee a new puzzle division. There are also plans to explore international FOB possibilities for ‘The World’s Most Beautiful’ and Creative Leisure brands and – subject to negotiations with Ken Duncan – to introduce that range FOB overseas. “We are already selling our Leisure Wise range FOB to major accounts here in Australia and there is no reason why it won’t sell equally well overseas,” says Crown. “We put most of our FOB range in set-up boxes because people want to keep the pieces in the box. With some of the really cheap puzzles, the boxes are so fragile that they collapse when they’re opened.
“We have access to the artists that we use in our ‘World’s Most Beautiful’ range, for instance Chuck Pinson is one of our best-selling artists and he has agreed to extend the licence to cover other countries.”
According to Golad, the acquisition means access to expertise goes both ways, with Goliath planning to look closely at the opportunity to expand into high-quality jigsaw puzzles – a new area for Goliath, but a particular strength of Crown & Andrews.
“I’ve always admired Crown & Andrews,” Golad says. “We share many of the same products and we are confident this new partnership will ensure the continuity and growth of one of Australia’s most prestigious and best known toy and game companies.”
Crown says he too is very pleased, “The Golad family have been long-time friends, and becoming part of Goliath will bring a fresh and aggressive approach to our company”.
From: TOY & HOBBY RETAILER JUNE 2015. Republished with permission.