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 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.
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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)
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