Wednesday to Sunday!
31 Jan – 4 Feb 2018
Spielwarenmesse®: Mr Frey, at the EOG annual meeting in run-up to the ISPO, 40 % of the leading representatives in the outdoor industry reported that their expectations were exceeded in 2013 and 90 % believe that 2014 will be a good year, too. Is everything going well at MTS?
Sebastian Frey: We've experienced growth every year for 12 years in a row and almost always in two figures. 2014 was another good year in which we exceeded our target. What inspired us above all was Streetsurfing with the waveboard and the booming longboards, but also Schildkröt Fitness or our Talbot Torro badminton sets.
What percentage of turnover do exports represent and which markets are most important to you? A few months ago you increased staff numbers to grow the Benelux market.
S.F.: Traditionally, we are particularly strong on the German-speaking markets. Whether it's a matter of Schildkröt or Talbot Torro, these are all old German brands. But we're gradually tackling the more interesting export markets. For many years, for example, we've had a Frenchman on the team who has really opened up France and Belgium, a British man who has handled the key accounts in the UK and Scandinavia and a German-Portuguese man for south-east Europe. So we will also gradually continue with new colleagues and carry on increasing the share of sales outside the DACH region.
The toy industry is on a roll. In the first 10 months of 2014, the Sports & Outdoors segment rose 9.5 % according to the Eurotoys panel. What figures have made 2014 an outstanding year for MTS Sport?
S.F.: MTS enjoyed a few more percentage points of growth, which, however, was naturally in part down to MTS's new product groups in MTS, such as Streetsurfing.
With your brands of Schildkröt Fun Sports, Donic Schildkröt and Streetsurfing, you want to have a say in the toy trade. However, the associations of the toy industry are also backing private brands or imports. Do you have the better arguments?
S.F.: Solely because of the way it is structured, the specialist retail trade requires other margins and so always ends up with higher retail prices than any discount or wholesale distributor. These higher retail prices can be justified only with prestigious and well-known brands. Can you tell me the difference between Aldi's own brand and the association's own brand, apart from the fact that Aldi will always be at least 30 % cheaper? Private brands are the wrong way forward. Two major toy-buying groups in Germany have realised this and do a lot of work with us.
You're responsible for the statement that Schildkröt Fitness wants to win over retailers with a coherent concept. You can't do anything these days without a concept anyway. What are the benefits of your concept? Where do you score highly?
S.F.: We only live well if retailers can live well and enjoy selling our products. To this end, we have beautiful, good-quality products and good brands in all areas as well as an above-average trading margin. But another important point is the wide range of products, the good MTS field sales force and a well-functioning structure. As an owner-run, medium-sized enterprise, our way of thinking is sustainable and durable, and not just aimed at short-term yield maximization.
When we see your brand portfolio, we feel just as with Dr Oetker, that there are so many brands cavorting under the umbrella of MTS Sport. Don't you squander a lot of energy on brand building, because you have to "pamper" each of them?
S.F.: MTS offers a variety of brands, which have a high reputation and credibility in the relevant field, all from a single source; the target audience also differs from almost every brand to another. I think this is more useful than a watered-down global brand. Besides Dr Oetker and MTS, there are many other very prominent examples that are similar – especially in the field of toys.
The outdoor segment is said to be suffering from severe price pressure, but that's what you hear everywhere all the time. Can we describe that as the usual business talk?
S.F.: Sure, times have been better in the past. The situation in China isn't easy and now the USD exchange rate is increasingly giving us cause for concern. But complaining doesn't help. We're alert and looking for solutions. Strong brands and a well-functioning structure will always offer reasonable living and chance of survival.
Apropos China... Companies are increasingly complaining that costs in China are spiralling. Some companies are already looking for alternatives. How long will MTS stick with China, the world's workshop?
S.F.: Naturally, we aren't going to break off with China in the short term – with our own factory there, that's not an option for us anyway. Currently more and more is being automated in order to respond to the shortage of skilled labour and increased labour costs in China. Against this backdrop, however, I'm pretty sure that we will once again start production in Europe in the medium term.
According to the local media, Germans do exercise, even though doctors sometimes take a quite different view. What MTS products do Germans like exercising with most? What are the current "best sellers", especially in the toy trade?
S.F.: Health, fitness and sports means lifestyle and you can earn good money with these segments. Almost the entire sports sector is proof of this. And: sports = brands! Besides our classics of table tennis, badminton or Speedminton® brands, it is in particular the Streetsurfing waveboards, once thought as dead as a dodo, that are making us happy. But the trendy longboards and all the fun sports from Schildkröt are also very well received by our many toys dealers.
In 2014, MTS travelled to Nuremberg with, among other, scoop ball, beach tennis, bowling sets and modified waveboards. What can children, as well as adults, use to keep fit in 2015? Is there a "smash sensation"?
S.F.: At the Spielwarenmesse 2015, we'll be presenting an extensive longboard collection, a new waveboard made of wood, a new colour OGO Sport Special Edition, etc. at our new and significantly larger stand now in Hall 7. A visit to MTS, especially from retailers that are not typical buyers, is always worthwhile.
The Spielwarenmesse® is becoming increasingly international. Have you noticed that? Are your contacts also becoming more international?
S.F.: For us, the Spielwarenmesse has been very international in the last few years, which is why we will also be there with our complete export team in 2015. We're glad that such an international industry event exists!