AMIC Trading (Pty) Ltd: Converting success into child’s play

Back in 2012, one of the world’s leading toy brands was involved in a takeover, with ambitious new owners vowing to grasp the opportunity to expand across Africa.

Toys ‘R’ Us and Reggies passed into the hands of Mohsin Mia and Christian Larsen,  who saw the opportunity of moving from the distribution of toys and baby products to selling them to the rest of Africa when the founders decided to sell Redgwoods, the company that owned the 2 brands.

Mia and Larsen bought Redgwoods and took ownership on December 1, 2012, with bold plans to expand the group’s 65 stores in South Africa to outlying areas and to other parts of Africa.

Fast forward to November 2014 and the pair’s hopes were starting to become a reality, as it was announced that Toys R Us planned to open roughly 90 new stores around the world, including 17 new Toys R Us stores and Side-by-Side stores in South Africa by the end of 2014.

The Toys R Us brand is of course recognised the world over. For many years in South Africa, the company relied on local suppliers such as Larsen and Mia, who worked closely with the Reggies and Toys R Us side of the business, on issues like brand licensing, sourcing and logistics.

toysrus-store-shotThe first Reggies store was opened in 1971 and the family-owned business Redgwoods grew operations to include the Toys R Us license. Larsen and Mia were owners of Redgwoods’ largest supplier of baby and toy product as well as supplying various key retailers in the country. After years of a close working relationship they learned much about the business and jumped at the chance to acquire Redgwoods under the company Amic Trading (Pty) Ltd.

With a strong logistics, sourcing and brand licensing background as well as a strategic approach to the retail brands, unprecedented growth for the brands was expected, as Larsen told The SA-Mag in April 2013:

“After building and sustaining our distribution company into a large-scale successful enterprise it was a natural progression to move into the challenge of the retail environment,” Larsen said. “Bringing a strong logistics knowledge to an already powerful retail chain was the perfect fit for the growth possibilities for Toys R Us and Reggies.

“With the global trend of retail expansion into Africa and the entry of Walmart into South Africa, Toys R Us and Reggies needed to put in place long-term planning and a fresh force to push the chain to new heights,” he continued.

“In order to maintain market share as well as to pre-empt the increasing competition, the challenge to grow the business as well as a personal growth opportunity presented itself to Christian and I,” added Mia.

With Amic Trading established as the license holders for Toys R Us as well as the owners of the Reggies brand, the new company became South Africa’s largest and most reputable toy retailer with a national footprint of 66 stores under 2 retail brands, Toys R Us (inclusive of Babies R Us) and Reggies. As exclusive license holders of the international retail chain, Toys R Us, there are 25 Toys R Us stores strategically positioned in all major metropolises in South Africa. These form part of the nearly 1,500 Toys R Us stores internationally.

Complimenting a network of 25 Toys R Us stores in South Africa (at the time) and 1,500 internationally, Amic Trading also owned 41 Reggies stores, easily accessible in malls and centres nationwide and a brand that offered South Africans 45 years of heritage.

At the time, Larsen explained to us the importance of store location as part of the new company’s strategy:

“As owners of two separate toy retailers we strategically place our stores to prevent cannibalization of our own sales. Not only are there geographical considerations in finding relevant store locations but also the mall environment is considered and of course the community and reach the location serves.

“Toys R Us stores are destination stores of 1,000-2,300 square metres and will be found in all destination malls in the major cities of South Africa. Reggies stores tend to be a little smaller, typically covering 500 square metres and servicing localized areas and suburbs as well as outlying areas outside of the main urban districts. The Reggies store is your “neighbourhood” go-to vs the destination super-mart that is Toys R Us.”

Mia outlined the challenge presented by lack of storage space: “On a short-term operational basis our largest challenge is managing and locating our retail space and rentals. In a landscape where retail is king – landlords are emperors. It is a continuous challenge to account and forecast for lease increases as well as implement business objectives in conflict with landlord requirements.

“We carry approximately 25,000 SKUs throughout the year, with toys making up the largest category and accounting for around 55 per cent of that figure. To an extent there is a seasonal element to the SKUs but generally our offering remains stable throughout the year. Naturally our volume is increased across relevant SKUs over the Christmas period. The SKUS themselves vary throughout the year but the total SKU count remains the same.”

Amic’s range of specialist toy, baby gear (including prams, highchairs, strollers), nursery furniture (cots, gates etc.), outdoor fun (such as pool accessories), games and electronic entertainment continue to make them the leaders in both the toy and baby categories in South Africa.

When we spoke in 2013, Larsen and Mia were excited by the future:

“The future? In a word – Africa. Africa is a key focus region globally and with our expertise in supply and retail to the local South African market we plan to aggressively expand our footprint into Africa. With our anchor in South Africa we envision propelling our presence north and being the number one toy and baby destination for Africa,” Larsen affirmed.

“There are huge opportunities. The intention when purchasing the business was to utilize our current South African retail base as a springboard into Africa. Focusing first and foremost on Southern Africa and then moving up into Western Africa,” Mia added.

Those grand plans have been fully put into practice in recent months with a plan that is working terrifically well. It seems likely that children from South Africa and far beyond will be playing and learning thanks to Amica Trading for many future generations.