Philippe Gueydon had once hoped to be able to form a toy distribution giant in France. On April 27, the parent company of La Grande Récré, Ludendo Entreprises, was placed in receivership. The brand created in 1977 and its 97 stores have since been looking for a buyer. Several candidates had expressed their interest. Among them, the two main competitors on the market: JouéClub and the family business Kingtoy, headed by Philippe Gueydon.
The various players had until May 16 to submit their final offer. But faced with the offensive of its rival, King Toy – 200 points of sale in the territory -, and Philippe Gueydon finally gave up, for lack of sufficient financial support. JouéClub now seems in pole position to win the bet. The decision is expected on May 22 from the side of the commercial court. With L’Express, the entrepreneur justifies his withdrawal and projects himself on the promising future of the toy market.
L’Express: Why did you submit a buyout offer for the Grande Récré?
Philippe Gueydon: Kingtoy had already had a successful experience on a takeover in 2020 with the Belgian brand Maxi Toys. We also felt that we could still complete our network and that the locations of La Grande Récré would allow us to do so. On this basis, we therefore submitted a first offer on April 28, when the procedure was initiated before the Paris Commercial Court. We proposed to take over 45 stores and 529 employees. And then, alongside that, on the social aspect, we wanted a reclassification of 60 positions – employees of the central and stores – that we could not resume.
Why did you finally give up?
La Grande Récré are rather premium pitches, with qualities, but also high rents. In some cases, we weren’t able to increase the turnover to a sufficient level to be able to absorb them. We also had a logic of efficiency in the sense that it is a brand whose difficulties date back to 2015. The company has been roughed up, with little investment in the store network and supply problems , as well as teams at the plant level which have been reduced significantly. To manage to do something, we thought we had to pool everything, by pooling our resources. La Grande Récré is a great company. But maintaining two brands in the same territory represents a lot of investment. Our competitors had submitted a different and significantly broader offer in terms of scope. If we wanted to have a chance of being able to win in court, we had to go up the offer.
What are you planning on now?
We have other battles to fight in the coming years. We must always succeed in this digital transition at our points of sale. We also have a whole subject around CSR and in particular on the product side. But there are also other aspects that we must work on over time. All this mobilizes the energy of our teams, but also our financial means. We couldn’t carry out all these projects at the same time.
Are you considering another takeover project?
No, as it stands, we have nothing in mind. Our brand has around 10% market share. We already have a critical size. We also believe that the battle to be won over the next few years is not that of size, but rather that of the efficiency of the business model. We are still a little frustrated not to have managed to go to the end and not to have managed to cross this financial wall.
Were you taking any risks by taking over this brand?
Trade in general is particular. The fact remains that in all sectors, there are companies that are doing well. I think that the analysis should not be globalised. Companies in difficulty have often taken reckless financial risks. It’s not so much the fault of the business models. I found out that in 2018, Toys R Us was showing up in court, not because the business model no longer worked, but because of the US parent company’s debt levels. Two out of three toys are still bought in stores and the rest on online sites. The risk is not so much the change in the mode of consumption, but once again, relates to the financial stakes.
How is the toy market in France doing today?
Since the beginning of the year, the market has been in decline. It is not worrying. The best analysis one can make is to look at how it behaves over the long term: it is a resilient market, rising slightly in some years and falling in others. 2023 will probably end slightly negative, it’s not the end of the world. There are other sectors that are much more tossed about than that. When video games arrived, everyone said that the traditional toy was going to disappear.
You mentioned the digital transition earlier, do physical toy stores still have a future?
In-store purchases remain the majority. The one on the Internet will still progress a little. But we already feel a kind of ceiling. The physical store is all the same the possibility of seeing, of touching the toy, of having a salesman in front of you who explains to you well if it is adapted to the age of your child. Internet, it remains a cold purchase. Certainly, being at home on your sofa offers an ease, but the toy is a pleasure purchase. I think the magic of the toy goes through the physical dimension of the store.
What relationship do you have with e-commerce?
Today Amazon is the main player in the market and our main competitor. Once again, you have to offer what the American company does not provide, that is to say, you should not try to do the same job as them. On their site you see the contents of the box and the description. But that’s not what I call discovering a product. In the store, the child can see what he likes to do, if the toy is suitable, if it is from the first age. We don’t offer the same toy for a 3-month-old baby as for an 18-month-old baby. All that is the role of the store clerk. This is an asset that Amazon does not have.
Are you trying today to favor the production of French toys? Is this a subject you are working on?
Of course. The real French toy, both produced but also created in France, weighs around 15% of the market. This share increases slightly each year. And at Kingtoy, it goes up to 20%. We have a real legitimacy to push these products, while on a site like Amazon, French toys are a little drowned. In our stores, we identify these products and continually seek to make operations to make them better known. This is in our DNA and we also strive to find toys made from recycled materials.
Do you feel that there is a demand from your customers?
Not necessarily. Let’s not forget that the toy remains a product where the prescriber is the child. If he asks you for a Pokémon card game, which is not made in France, you will not be able to come back with a French product. The price is also higher than a toy produced abroad: we nevertheless feel that consumers are more and more attentive and ready to make the effort to pay 20 to 30% more. The average price of a French toy is around 20 to 30 euros. We are trying to guide the consumer’s choice in this direction.
Have you felt the impact of inflation?
Today, in 2023, there is no inflation on toys. There were some in 2021 and 2022. This represented an increase of about 10%. It’s a lot, but it has nothing to do with food. Turnover is holding up, while the average price has increased. This means that the quantities are falling, but in a limited way. There is no disengagement. Inflation is rather shaking up our operating accounts with salaries, energy… The difficulty will be in managing to improve our margin plans and that is what we are currently working on.