Ravensburger North America CEO Filip Francke joined Yahoo Finance's Jen Rogers, Myles Udland, and Rick Newman to discuss the company's surge in sales as more and more people stay home due to the coronavirus outbreak.
MYLES UDLAND: Let's move over to-- talked a lot about the at-home work trade. Well, let's talk about the at-home leisure trade, the puzzle business booming right now. Let's bring in CEO Filip Francke. He is with Ravensburger North America.
Filip, thanks for joining us. And I guess let's just start with what you guys have seen in terms of sales and demand over the last few weeks, as I think most of the country realized they're going to be spending a lot of time in their home for at least the next couple of months.
FILIP FRANCKE: Thank you, Myles. Thank you for having me. You know, first of all, I just want to say, of course, that puzzles is not a necessity at this time. But as you're alluding to here, we're seeing, you know, unprecedented surges in demand for puzzles and, to some extent, also for games. So we've seen, you know, three weeks now where we really are experiencing Christmastime at Easter in regards to sales.
JEN ROGERS: So we've seen this with food and toilet paper. Do you think people are hoarding puzzles right now? Are they buying more than they can actually use?
FILIP FRANCKE: You know, we do see that in a market like this, where most of the puzzle players are pretty much out of inventory, of course, there is a little bit of a run. And we do see somewhat of a short-term black market here, if you call it that, where people are making an extra buck.
I think the important thing that we see is that this trend has been going on for quite some time. You know, puzzles and games, particularly puzzles, have been growing for years. And the underlying drivers of that growth, I think, are actually the same ones that we see now in the crisis, just amplified.
So, you know, I know you're a puzzler. I heard that here as-- in the preparation, you know. There are several reasons why people puzzle. The number one reason from a nice Ipsos study that we published last year is relaxation and being mindful, then having your own time. You know, we can see that that is amplified in a time of unsecurity.
The second reason that people puzzle is really, you know, what we call brain boost-- so an activity with some type of purpose behind it-- so making sure that, you know, you're working on something. You're learning something. And so--
And the third and, you know, really important aspect of why people are puzzling is coming together. A lot of people think of puzzling as a maybe lonely activity. But we see a lot of people using puzzles to come together, to connect in a somewhat intimate environment. And all these things, you know, have been going on for years. And we see them, of course, taking a very strong step upwards during this time.
JEN ROGERS: I was going to ask you-- you brought up two ways that people do puzzles, solo or with families. Do you think that-- I'm just asking for a friend here-- that puzzling brings people together more or divides them when they do puzzles as a family?
FILIP FRANCKE: You know, I can only talk from my own experience in this. I have teenage kids at home. And I use puzzles, really, to get, you know-- to get to-- you know, to me, it's the best way of connecting with them, to some extent. I was giving the advice early to always have a puzzle out. And when a teenage girl is puzzling, I make sure I run up to the puzzle table and sit next to-- and puzzle because then, all of a sudden, without me pushing for a dialogue, something might come up.
So I would believe and hope that this is mainly coming together. However, of course, you know, there are puzzle competitions. And some people are more into making things fast and putting in that last piece. And I'm sure there's a little bit of frustration going on at times, too.
RICK NEWMAN: Filip, it's Rick Newman. I just want to point out to our audience you're using "puzzle" as a verb. And Jen, I think, was reluctant to go that far. Jen, you said you do puzzles. I think maybe you just have to say you puzzle from now on. That's an aside.
I do crossword puzzles. And I like doing them digitally on an iPad or something like that because you don't have to erase. And so I'm wondering what advantage do physical puzzles have over video games and all this stuff on a screen that kids use to entertain themselves these days?
FILIP FRANCKE: So thank you, Rick. So I think that there is a-- you know, behind all of this, there is a code-- of course, a trend where people spend more and more time on their digital devices. And this trend is pushing the whole toy industry forward into more physical experiences, actually. So this idea of detoxing from your-- the digital screens or-- and disconnecting to reconnect-- we see that as a really strong reason why people are turning to more physical activities like jigsaw puzzling.
Spending a little bit more time focused on one activity, having the satisfaction of completing something, and maybe even doing that together, is something that people are missing. And we see that in puzzles. We are also a big games company. We see that more and more people come together over family games where they, you know-- a lot of times, in a collaborative type of game, solve things and live through an experience together.
So, you know, we also see digital puzzles growing, of course. And I see that as a great compliment. But our focus here is, of course, a great physical puzzle experience, which is what people seem to crave at this point.
MYLES UDLAND: All right. Filip, before we let you go, quickly, are you a corner or an edge guy? Jen wants to know.
FILIP FRANCKE: [LAUGHING]
You know, I always start with the corners. But it is very interesting. A lot of people start in different, you know, directions. And I just want to point out maybe one of the most important things that will happen after this-- you know, we expect this puzzle trend to go on, of course, because of the underlying drivers being the same. But what we do see is people like Jen are outspoken of being, you know, puzzle fans.
And we realize that there's a lot of puzzle fans out there that has not been so-- you know, so open about their passion. It's a quiet activity that maybe, with this crisis, we can see a lot of social media with a very flourishing Reddit community that's been doubling in size over the last few weeks. Maybe this is the time where puzzle becomes a mainstream activity that we're actually there to talk about.
MYLES UDLAND: All right. Well, as you said, Christmas in July-- or Christmas at Easter, rather, for the puzzle industry-- all right. Filip Francke is the CEO of Ravensburger in North America. Thank you so much for joining the program today.
FILIP FRANCKE: Thank you. Take care.