At the kickoff of the 2002 holiday season, we talked to distributors that sell to pop culture stores in four major categories -- toys, games, anime, and comics/graphic novels -- and found them generally optimistic about holiday sales, with reservations in some areas.  Of the four categories, opinions on game and anime sales were the most uniformly positive. 



All three of the distributors we talked to were happy with sales in the year to date and looking forward to good sales in the holiday season.  Mike Webb of Alliance Game Distributors said, 'For the most part, same store sales are up.  Also, we have seen a larger number of new store openings than in the past couple of years, combined with a slower pace of store closings.' 


Sito Sanchez of GAMUS Distribution (formerly Georgia Music) said, 'I personally feel most retailers should be up by now.  Without a doubt they'll be up for the holiday season.'


Michael Cox of Centurion Hobby Distributors told us, 'Overall, I feel that since spring, there have been so many solid and good-selling releases, that there was never really much of a lull period.  I am hopeful for good holiday sales, and we are seeing the usual uptick in boardgame sales.'  


Cox's observation on the number of good releases was echoed by the other distributors.  Webb said, 'This has been a year with several sustained hot products.  WizKids has continued their market growth with three uber-hot releases in the DC and Marvel HeroClix properties and Mechwarrior.  At the same time the core Mage Knight business has continued to do well.  Yu-Gi-Oh has brought a welcome infusion of cash into many stores, and has also brought in some new customers.'


Sanchez mentioned Lord of the Rings, Yu Gi Oh, Magic the Gathering, and the WizKids lines as strong 2002 products.  He also noted the increased amounts of Yu Gi Oh product flowing into the market, which while not enough to fill all demand, were helping to accommodate the new customers coming into stores.


In RPGs, d20 products were top of mind, with continued strength at the core and weakness at the fringes.  Webb said, 'In roleplaying, TSR has released some strong products such as Book of Vile Darkness, and we have seen the return of classics like Hero and Champions.' 


Sanchez said 'd20 is still pretty strong, particularly the WotC product.' 


Cox and Webb both expressed the view that the proliferation of d20 releases was hurting some titles, with a shake-out in the number of companies in the field coming after the holidays.  Cox tied it to shorter shelf-life.  'I am VERY disturbed by a lack of restocking of product that I would pretty much believe should be on every major retailers' shelves.  With the velocity of new releases brought on by the d20 invasion, we are seeing a fire and forget attitude....This is an even greater problem with stores that are not using a POS system.  They just can't remember everything that has sold, and gone are the days of being able to stock so many different companies all the time.  I mean after all, hasn't there been a d20 dwarf book every couple of weeks anyway?....I think there will be a weeding out of some of the d20 companies even though none of them want to admit it.'


Webb also noted inventory management issues.  'On the manufacturer end, I see a coming shakeout of the d20 market in the coming year -- but then, who hasn't?  But I think that inventories at the end of the year will have many stores evaluating future d20 purchases in the light of quality of previous product offerings and in originality.'



Comics are coming off weak orders for October and November, indicating poor sell-throughs in the late summer and early fall (see 'Comic Dollars Down Again in November'), but things may be picking up.  Diamond Comic Distributors VP-Marketing Roger Fletcher said, 'While we've gotten some anecdotal reports from our customer service and outside sales reps that some retailers are reporting lower traffic and sales in September and October, this may just be part of the 'normal' back-to-school cycle, magnified, perhaps, by the fact that the beginning and middle of the year were strong for most.  In addition, we're hearing that momentum is starting to return, leading into the holidays.  As for Diamond, our sales to comic shops are up in almost every product category, including comics, compared to last year. '


FM International VP Wayne Markley said, 'September was a bit slow, but October and November are up a little due to more product coming out.  Sales are up on some titles, not across the board.  The comic stores we talk to seem fairly happy.' 


Sanchez identified probably the hottest comic category this holiday season.  'We're seeing manga graphic novels explode,' he said. 


The comparisons to last year are tough for comic stores, with only the new Jim Lee Batman run a breakout hit anywhere close to the scale of the three hot areas in comic stores last fall -- Marvel's Origin, DC's Dark Knight Strikes Again, and Marvel's 9-11 books. 


Over-all, it seems that the jury's still out on exactly how good or bad sales are going to be in comic stores this holiday season.  Things seem ok, but not great.



In addition to Fletcher's observation that sales in all categories were up to comic stores, we have Sanchez's more enthusiastic endorsement of anime sales.  'Anime is huge,' he said.  'We've never seen it this big!'



Pete Timinskis of TMZ Distribution, which specializes in Japanese model and toy imports, saw some areas of weakness in comic store sales of toy products.  'Hobby stores are still doing pretty good,' he said.  'Comic stores are still doing well, but the expensive stuff is all dropping off.  Even the toys and models have have fallen off but not as badly as the high end stuff.'  He said he'd talked to a lot of retailers in the last few weeks and they were telling him that there was considerable anxiety among their customers. 'Retailers think people are scared about everything,' he said, listing the threat of war with Iraq, Osama bin Laden's threats, and the economy. 


Gamus' Sanchez was more optimistic.  'The statue business is still strong,' he said, noting that Bowen was still dominating sales.  He also mentioned the Transformers Mini-busts and the Star Wars Mini-busts from Dark Horse as doing well.  And he noted the impact of the biggest movie of the year.  'Anything Spider-man is flying out of here,' he said. 


Sanchez also said Beyblade was big for GAMUS.  'Hasbro with Beyblade is huge.  If I could get 500 cases today, they'd be gone today.'  Shortages in other channels were making it possible for all channels to sell all they could get.  'Even though Wal-Mart has it, it's gone within a day.' 



In the retail world as a whole, November has been at or slightly below expectations, with tough comparisons because Thanksgiving is much later this year than it was last year.  With a shorter holiday season, and some consumer confidence issues, holiday shopping is expected to be late, promotionally driven, and probably just ok.  We think sales in pop culture stores will be a little better than that, but not huge.  In a month we'll know.