The business may have made a loss of £4.08m at the beginning of 2014, but North has claimed that 2015 has been budgeted to be the second best performing year in the company’s history.
This serves as evidence that following any difficult period of financial stress, there is light at the end of the economic tunnel. More importantly, it is most likely due to, as its bestowed title suggests, a relentless pursuit of innovation.
North once explained that the company’s ethos was to create toys that have the “Wow!” factor. They have to be visual and exciting to play with.
“The toys must lend themselves to our ‘brought to life’ strategy – using in-store videos and live demonstration artists,” the CEO said. “We are really looking to create blockbuster toys that have the potential to sell globally, in large volume.”
The “gestation period” of such technological toy developments are usually two to three years and require substantial investment.
According to North, these investments totalled more than £6m. However, the new toys led to distribution deals with Hasbro, the second largest toy company in the world, and Vivid Toy Group, the UK’s largest independent toy company.
But he has remained clear that his current acclaim is also due to “employing great people, and finding the best”.
“In our business we look for ‘bright-sparks’, they need to have intelligence but also common sense,” he said last year. “The spark refers to an explosive nature, a dynamic person, explosive piece of energy. Everyone in the business should be a ‘bright-spark’. I hear too many people say you need your plodders.
“My belief is that you need people with ambition, even if that means you only get them for a couple of years. It’s about hiring great people who can do great things no matter where in the business they are.”
In a sense, his need to have such qualities across the company has helped the business succeed. You need people to both think outside the box and also leverage the power of the organisation to make something work.
Through “their hard work”, Wow! Labs, the innovation arm of Wow! Stuff, is currently set to raise an eight figure sum following its recent toy tech successes with Dave the Monkey, Combat Creatures, Airswimmers and Real FX Racing.
The raised finance will further develop the brilliantly niche market of expandable slot-less track systems across multiple territories.
The UK is seen as home of the slot car and the very essence of model car racing is as British as bangers and mash, according to head of Wow! Labs, Graeme Taylor.
“Like all great inventions they inspire us to keep moving things forward and while we believe there will always be room for slot cars, that market is relatively small across the globe,” Taylor said. “Radio control is the dominant category because consumers have realistic steering and therefore greater control. It’s here that we want to make an impact.”
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That is the premise behind Real FX racing, which allows the user to overtake or undertake anywhere on track, with no predefined overtaking positions or pre-set lanes.
The funds will enable the team to further develop expandable slot-less track systems and firmly establish Real FX as “the most realistic racing experience outside of the real thing”.
This combination of artificial intelligence and old-school racing appeal, has already proved to be a success in Japan, leading North to patent the track system. The track keeps the car from driving off and also tells it where and how to steer.
More intriguingly, the cars are smart. The remotes provide race sounds and let you add racing elements like a pace car, a virtual race opponent and even virtual hazards like oil slicks. If you add a pit area to the track, then the cars will recognise it. If they never drive into it, then the car’s performance will slowly degrade.
Wow! Stuff is also targeting further international expansion after agreeing additional funding from HSBC’s Midlands Commercial team. It has secured HSBC Global Markets facilities totalling $4.45m, alongside an extension in other lending facilities, to help drive sales and product development.
Innovation is also about broadening your horizons, in the creative and commercial sense.
The company is targeting growth across a number of international markets, with a particular emphasis on the US. This market has been forecast to grow to 60 per cent of sales by 2015.
North said: “Growth outside of the UK is our main objective. It spreads risk by having strong sales outside our domestic market and creates greater awareness of our new brands at an international level. The US is a growing market for us and this new facility is important to our development there as it allows us to hedge against interest rate movements and plan more effectively.”
In addition to supporting growth into overseas markets, Wow! Stuff is still using investments, this time in tooling, to produce new product designs.
In April 2015, Vivid Imaginations hijacked the Gadget Show as the first consumer launch for the product, giving kids, teens and adults the chance to get up close and personal with the new slot-less AI racing offering.
“It’s been a huge hit,” said Taylor. “At 9.23am on the first day, Vivid’s marketing director Mary Wood, sent us a note to say ‘the doors have only just opened to let consumers in and the Real FX area is already busy’. At 2.30pm, she wrote ‘Real FX has been the busiest area’.
“As the video shows, the proof of the pudding is in the racing.”