Deep pockets but no plan: the Horst Brandstätter Holding in 2021

[StJohn]

manager magazin published an interesting article about Geobra on February 18th: Das irre Regiment bei Playmobil [behind paywall]. luipold at Klickywelt offers the German text, of which I did a quick translation. It is fascinating stuff.

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At Playmobil, even Santa Claus cracks the whip. At least, that's what the long-suffering employees of the Franconian toy manufacturer might have thought when in December "Queen" Marianne Albert (62) had a figure in red and white with a reindeer sleigh placed above an announcement about the company's situation.

After an already "unsatisfactory year 2019," business in 2020 is "continuing to decline," Albert announced, adding: "This development cannot be ascribed to the Corona pandemic. We are currently less relevant for the consumer with our offers." You can't get much clearer than that, you have to hand it to her, about the plight of the company.

It does not come as a surprise that Playmobil, unlike its competitors, isn't benefiting from the plight of many parents who have to keep their offspring entertained between home office and home schooling. Since 2015, the year of the death of long-time patron and owner Horst Brandstätter, chaos has reigned in Zirndorf near Nuremberg. Absurd power struggles, pressure and a lack of vision are damaging Germany's best-known toy manufacturer. The culprit is probably the most bizarre management team in the Federal Republic of Germany.

At its heart is Marianne Albert, a publicity-shy woman who, as Brandstätter's secretary, was skilled at reading every wish from the lips of the Supreme Klicky. Ever since she was appointed executor of his will and chairwoman of the advisory board – a decision aimed at securing that everything would remain as it was, nothing has remained the same. Quite on the contrary, everything is getting worse.

The company still doesn't know how to respond to the challenges of a digital age, the announced construction of a plant in the USA has not materialized, and instead of investing Brandstätter's assets – with equity capital of around 1.5 billion euros, Horst Brandstätter Holding may well be considered a bank with a subsidiary injection molding factory – the company is relentlessly saving money.

The payoff: according to the latest available balance sheet, profit (EBIT) fell by almost 20 percent to 94 million euros in fiscal year 2018/19, while return on sales (over 22 percent under Brandstätter) plunged to 14.6 percent. It is likely that this trend will since have intensified, especially because projects of great expectations, such as "Playmobil - The Movie" and new toy lines like "EverDreamerz" and "Novelmore", flopped. In 2019, sales fell slightly by 1 percent to 742 million euros; the previous year did not fare any better. A turnaround is not in sight.

Instead, turnover in management is on the increase, lawsuits are regularly filed in court, and Queen Albert is isolating herself and her inner circle.

Yet it wasn't all that long ago that many were dreaming of the great step forward. In 2018, Playmobil recruited Disney manager Lars Wagner (49). He was supposed to use the brand's popularity to earn proper money with licenses and TV series, away from the silly plastic figures – just like competitors like Lego are doing. But the spirit of optimism did not last long.

In the meantime, Wagner has become history, just like his plans. Head of Entertainment Christine Brand (53) has also left. Wagner's job was taken over by Wolfgang Höger (55), a man who above all knows how to cut costs: Höger previous job was toys Procurement Officer at Kaufhof. In place of Robert Benker (62), who has resigned as Chief Technology Officer, Thomas Weberbauer (50) has been given a chance to prove himself. Commenting upon the arrival of this former Technical Director of the plastics company Wirthwein, Albert explicitly emphasized his "experience with site closures".

Hardly surprisingly, Head of Human Resources Cordula Glatthaar (46) was also quickly gone; she lasted a whole two months. "Dismissals, warnings without end, psychological pressure and personnel transfers are the order of the day," complains plant supervisor Bianka Möller of IG Metall. "There is a climate of fear."

Meanwhile, Albert, chairwoman of the advisory board, continues to expand her power. With former Escada boss Iris Epple-Righi (55) and lawyer Rainer Kögel (53), external members have left the supervisory body. Albert does not need to fear any opposition from the former Canteen Supervisor Gerlinde Breitsprecher (71), or the equally veteran financial expert Peter Hille (72). The former executive secretary can keep a tight leash on the board of directors by virtue of the company's articles of association, and has final say in every important decision. Nothing should escape her attention. And if something does, there are allegedly 296 cameras on the company premises that capture every movement.

Yet Albert seems to be troubled by the fact that the Works Council sees this as a violation of data protection and threatened "very high claims for damages" at their last meeting on February 1st. People talk to each other in Franconia after all. Even if, as is usually the case, through their lawyers.

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Best wishes
StJohn

[GrahamB]

Oh dear, what a grim picture!

[tahra]

 

[Macruran]

Thanks for translating and posting this StJohn, it's very enlightening to get a peek into the "real" side of our little hobby.

Frankly none of what the article says is at all surprising. It's been clear just from the product lines alone that the Gnomes have been floundering ever since HB passed on. They are completely at sea. No vision, no consistency, not even a basic understanding of what Playmobil is - what makes it different and special. Goofball stuff like Everdreamerz given a full court press, while Greek gods, released as Greece only specials at first, become wildly popular without any promotion. Ultracollectible klickies released as Fi?ures, forcing collectors onto the secondhand market for new releases. Many such cases!

I only hope they become so desperate that they return to their roots some day.   

[Tiermann]

Yeah not too many surprises there. They didn't mention the weird corporate structure that was a huge mistake in my opinion. Instead of a single CEO it started out right after HOBs death with a three person committee. The first one was the director of operations, the production manager and someone from the marketing side. It quickly went through various iterations since people couldn't agree. It had been a single head company ever since HOB took over and he should have kept that structure even though he made it a charitable for profit corporation instead of leaving it to his son.

[Redmao]

Very interesting article.
I didn't know that Novelmore was a flop, specially with a new batch of sets coming this year. I think that the designs and characters make a fun knights' theme.

[Ismene]

Bleak, but not surprising. They've been flinging things at the wall, trying to see what sticks, without any real plan. They're out of touch with children, out of touch with collectors, and apparently out of touch with their own employees. They seem content to give half their profits to Ebay, and they refuse to make the simplest commonsense changes.

[StJohn]

They didn't mention the weird corporate structure that was a huge mistake in my opinion. Instead of a single CEO it started out right after HOBs death with a three person committee.

I suppose the triumvirate has come to an end, then?

What I find most fascinating are the 1.5 billion € in their savings account – the original German sentence is worth quoting:

statt Brandstätters Vermögen zu investieren – mit einem Eigenkapital von rund 1,5 Milliarden Euro ist die Horst Brandstätter Holding eine Bank mit angehängter Spritzgussfabrik –, wird eisern gespart.

I recently observed a boy with his grandmother at Kaufhof, carefully inspecting all the shelves, his eyes shining looking at all the sets, hers carefully reading the price tags. They took their time, negotiated happily together and made a pick, went off to the counter to pay and left the shop, the boy thanking his nan profusely. This is going to be a happy memory for both of them, and the scene made me happy, reminding me of my own youth.

Now remember that HOB was pretty much broke when he started with Playmobil in 1974, and consider how this, and many millions more of such transactions, have built his Money Bin over the years. There is more to that cash than just assets, it is a monument of the collusion of commerce and love. It makes my head spin.

[Birdie]

Thank you so much for bringing this article to our attention and for translating! 

Like the rest of you, I don't think it's surprising to hear numbers are going down, but it is very interesting to read this analysis on why.
I sure hope the company gets its act together and can turn things around with the right group of people. I still see how the toy and the brand remain popular with kids here, for instance the Netflix series Spirit and Heidi with their accompanying sets are a favourite come Saint Nicholas/Christmas/birthdays. The princess and mermaid sets are doing well too with my daughter, her friends, and my friends' and sisters' kids.

[Oliver]

Very interesting article.
I didn't know that Novelmore was a flop, specially with a new batch of sets coming this year. I think that the designs and characters make a fun knights' theme.

To be honest, success or failure I think they would have had to (or might as well, lets put it that way) press on with the second batch of Novelmore. I think they need to have some sort of 'knights' theme (especially in the absence of another 'historical' theme), and to design and produce a replacement probably takes years.

I think it would be fascinating to see a break down of what sells well, and I know you can take educated guesses from what comes-and-goes (and what sits constantly for sale on the website long after it's been axed....) but still.