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28 August 2016 18:37 (South Africa)
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Ponies and princesses: Hasbro launches charm offensive for girls

  • Reuters
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    Reuters

    Thomson Reuters is the world's leading source of intelligent informatiom for businesses and professionals. It combines industry expertise with innovative technology to deliver critical information to leading decision makers in the financial, legal, tax and accounting, healthcare, science and media markets.

  • Wired World

Having captivated boys with its Star Wars figures, Hasbro Inc is turning to Disney Princesses and the launch of its first animated movie to arrest a five-quarter slump in sales of its toys for girls.

The second-biggest U.S. toymaker has begun selling dolls from the popular Disney movies "Frozen" and "Cinderella" after wresting the lucrative license from its larger rival, Mattel Inc.

Hasbro will also launch "My Little Pony" toys throughout this year, Chief Executive Brian Goldner told Reuters, as it aims to create a buzz ahead of the 2017 release of a movie voiced by Emily Blunt and Emmy award-winning Kristin Chenoweth.

It's a strategy that worked well for Hasbro in the run-up to the December 2015 release of "Star Wars: The Force Awakens."

"Getting it on the shelves early allows Hasbro to maximize the window in which it can sell," said Neil Saunders, chief executive of research firm Conlumino.

Of Hasbro's four distinct product categories, toys for girls have long been a weak spot. In a fourth quarter that delivered the company's biggest revenue growth in nearly five years, sales of toys for girls fell 17 percent.

Toys for boys accounted for 40 percent of Hasbro's revenue last year. The contribution from toys for girls - its third-largest category, behind games - fell to just 18 percent in 2015 from 24 percent a year earlier.

A merger with Mattel, bringing Barbie into its world, might be one way to solve Hasbro's girl problems. Bloomberg reported this month that the two companies had held inconclusive talks about a potential merger.

Goldner, in an interview with Reuters, declined to comment on the report. Instead, he focused on Hasbro's plans to twin merchandise with movies.

Goldner, CEO since 2008, is no stranger to the screen, having brokered deals with several major studios for movies based on Hasbro's best-known brands. He worked as an executive producer on the blockbuster "Transformers" series.

"My Little Pony: The Movie" is the debut animation production of Hasbro's in-house film unit, Allspark Pictures, and will follow the adventures of Twilight Sparkle, Pinkie Pie and the other brightly colored ponies of Equestria.

Among the new toys slated for release are a purple dragon, Spike, and a winged foal, Baby Flurry Heart.

Speaking to Reuters, Jim Silver, editor-in-chief of toys and sporting goods review website TTPM, described the new dolls as having "a really modern, slick, cool look."

While analysts expect the ponies to sell well, a more immediate impact should be felt from the Walt Disney Co license, which includes dolls based on the hit movie "Frozen."

Leaving Barbie behind in fourth place, dolls based on "Frozen" princesses Elsa and Anna were second only to Star Wars on the "Top Ranked Properties of 2015" list compiled by NPD Group, a retail research firm.

"These products are already on shelves in the U.S. and rolling out internationally," said Goldner. "Shipments are now ramping up and early consumer indications are positive."

Stephanie Wissink, analyst with Piper Jaffray & Co, said she expected the license to earn Hasbro about $250 million this year and a further $375 million in 2017.

With most analysts expecting sales of Star Wars toys to be flat this year, toys for girls should contribute a larger share of Hasbro's revenue. A forecast from KeyBanc Capital Markets, for example, has the proportion rebounding above 20 percent in 2016.

The average forecast of 12 analysts covering Hasbro is for 2016 revenue of $4.7 billion, which would represent a 5.6 percent increase - the biggest, year-on-year, since 2011. Hasbro has not provided its own forecast.

Over the past two years, Hasbro's shares have risen by more than a third while Mattel's have fallen about 10 percent.

(Reporting by Subrat Patnaik in Bengaluru; Additional reporting by Siddharth Cavale; Editing by Robin Paxton)

  • Reuters
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    Reuters

    Thomson Reuters is the world's leading source of intelligent informatiom for businesses and professionals. It combines industry expertise with innovative technology to deliver critical information to leading decision makers in the financial, legal, tax and accounting, healthcare, science and media markets.

  • Wired World

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