North East auction house says invest in toys not shares

Nov 17 2009 by Andrew Mernin, The Journal

BUY Star Wars figures low, sell Barbies high and you'd also be advised add some Smurfs to your portfolio.

Forget commodities, the energy markets and the banks, the recession has left heavyweight investors with a new plaything – toys.

A North East toy auction house – the biggest of its kind in the world – has witnessed a surge in the number of disillusioned banking and stock market investors pumping their cash into toys.

Auction house Vectis says investors who have been rocked by the turmoil which has ripped through the markets are attracted by the long-term gains which can be made from collectables such as Dinky, Corgi and Matchbox.

The company was acquired by North East entrepreneur Bryan Goodall 12 years ago from an Isle of Wight firm, to fuel his passion for toy collecting.

It has since grown from a £5,000-a-year firm with no stock into a £7m enterprise with £750,000 worth of toy stock. It holds around 60 auctions around the world every year, more than any of its European rivals put together.

Now the business is gearing up for growth this year on the back of the surge of investment from wealthy former financial players.

Cataloguer and auctioneer David Nathan said: “A lot of investors are fed up with the banks, for a number of reasons, not the least of which is interest rates, which mean earnings are very low. They would rather take that money and put some of it into other things, particularly quality items. People are taking the money out of banks and putting them into toys. In the long term toys have proved to be a very good investment, a five to 15 year investment.

“We’ve seen pretty steady growth over the last three years, all our catalogues are up on the net and receive 40,000 new leads a month.”

Vectis recently sold a three foot-long tin plate ocean liner, made in the 1920s by a German firm, for £8,500.

Meanwhile it is not uncommon for sets of mint-condition Matchbox vehicles to fetch between £3,000 and £5,000, The popular Dinky brand of cars can be valued in excess of £1,000.

An entire boxed set of the original Star Wars figures was once sold by the Teesside group for £10,000, and, a sale of one of the largest collections of model figures ever auctioned fetched almost £125,000 in 2003. The current trend has seen toys which were popular in the 1980s, including He-Man figures, make their way into auction lots.

“No-one predicted that Star Wars would be so big,” he said. “It may be computer games in 10 years’ time. The biggest trend is that people are going for quality.

“As years go by toys are moving towards the 1970s and 80s. There’s a 25 to 30 year gap. If someone’s 15 when they receive a toy, when they hit 40 to 45, with a disposable income, nostalgia kicks in.”