HP-2020-000016 - [2025] EWHC 1451 (Ch)

Ms Munt considered that there was a high chance (which she put at a 60% chance) that Worldeez would have been a “success”. What she meant by that was explored at the end of her cross-examination. She confirmed that she did not mean a 60% chance that Worldeez would have been profitable, and she candidly accepted that she did not have sufficient experience of the financial and operational side of running a toy business to opine on Cabo’s financial and operational competence. What she meant was “creating a buzz” or “noise” with customers wanting the product and children talking about it. In response to further questions from the court, she said this:

“Q. You are talking about consumer excitement, but you are not saying profitability?

A. I’m not necessarily saying profitability, but I am saying that … that noise …

Q. All right. But if something is successful in your definition, you would include something that wasn’t profitable but had a lot of buzz on social media and sales?

A. Yes.

Q. So when you say 60% chance of success, you mean 60% chance of making a lot of noise and having sales even if not necessarily profitable?

A. Correct.”

I consider that Ms Munt’s evidence on this point was vague and speculative. She did not have any concrete underpinning for her opinion on Cabo’s likely success. Nor was she able to provide any evidence on whether Cabo would in the counterfactual case have been able to turn a product which created a “buzz” in the marketplace (if it did indeed achieve that) into a profitable product.

Mr Harper did, however, give evidence on that point. He explained that even with an innovative product and an effective marketing strategy, success of a new product in the UK is determined by “achieving strong enough financials to deliver a profit, accurate forecasting/inventory management and good retail distribution”, and that strong UK results could then in turn be used to drive international and licensing revenue. His evidence was that Worldeez would not ultimately have been successful in the UK, whatever level of retail distribution it might have achieved.

That view was in part based on his assessment of the quality of the Worldeez product, but also (and importantly) took into account his assessment of Cabo’s marketing strategy and budget, and its overall operational capabilities. Put in percentage terms, Mr Harper estimated that the chances of Cabo securing sufficient sales in its first year in the UK market to secure year two retailer listings were well below 10% and probably as low as 1–3%, and said that this would have been likely to result in a “significant loss”, depending on the inventory commitment. He was not challenged on this latter point, nor was it suggested that he lacked the knowledge and/or experience to make this assessment.