NEW YORK – Hasbro Inc. is shaking off its reputation as a boysâ€™ toy company.
In a major coup, the company known for Transformers and G.I. Joe announced yesterday that it secured the doll license starting in 2016 for two juggernauts of the girls toy aisle with Walt Disney Co.â€™s â€œFrozenâ€ and Princess brands. Even better for Hasbro is that itâ€™s taking the rights to make Elsa and Cinderella figurines from larger rival, Mattel Inc.
â€œWeâ€™re talking about hundreds of millions of dollars of revenue in Disney Princess going away starting in 2016,â€ said Sean McGowan, an analyst at Needham & Co. in New York.
Hasbro had been ceding the doll category to Mattel, which dominated with its own brands like Barbie and American Girl as well as the relationship with Disney. Instead, Hasbro built a girls business by reviving brands it owned, such as My Little Pony. That helped it triple sales from girls toys to more than $1 billion in a decade. With this deal, it has set its sights squarely on Kenâ€™s girlfriend.
â€œWe have a true understanding of girls globally and how todayâ€™s girls want to play,â€ Hasbro Chief Executive Officer Brian Goldner said in yesterdayâ€™s statement. â€œThe entire Hasbro team is looking forward to providing consumers with inventive new play experiences based on the beloved Disney Princess and â€˜Frozenâ€™ characters and stories.â€
Shares of Hasbro dropped 0.3 percent to $54.77 at 9:48 a.m. in New York, following an advance of 3.8 percent yesterday, the biggest gain since February. The Pawtucket, Rhode Island-based company is little changed for the year. Meanwhile, Mattel fell 0.9 percent to $31.38, adding to a decline of 1.3 percent yesterday.
Hasbro and Disney declined to comment on the length or the finances of the deal.
For Mattel, â€œthereâ€™s no question they are popular brands, but our portfolio is still quite strongâ€ with Barbie, Monster High and Ever After High, said Alex Clark, a spokesman for El Segundo, California-based Mattel. The company will also have â€œFrozenâ€ for the next two holiday shopping seasons, which will likely be the height of its popularity, he said.
While Mattel doesnâ€™t break out sales from the Disney doll license, McGowan said it may have generated $500 million in revenue last year and thatâ€™s likely to increase this year with the continued success of â€œFrozen.â€ The Oscar-winning Disney film about two royal sisters in an icy kingdom was released last Thanksgiving and became the fifth-highest grossing film of all time with more than $1 billion in global ticket sales.
That on-screen success has been a boon to Mattel, especially since top doll brands Barbie and Monster High havenâ€™t been growing. Mattel CEO Bryan Stockton called â€œFrozenâ€ the â€œstar of the portfolioâ€ on a conference call in July to discuss second-quarter results.
â€œMattelâ€™s revenue and earnings visibility got a little worse,â€ said McGowan, who recommends holding shares of Mattel and Hasbro. â€œItâ€™s a meaningful, but not crippling negative for Mattel.â€
The Disney Princess brand has been a phenomenon in its own right. Disney has perfected the cycle of releasing movies with female characters and then later initiating them into the princess sisterhood in real-life ceremonies that boosts merchandise sales.
Disney, based in Burbank, California, has driven the princess-fad over the past few years — one in which little girls could be seen wearing princess dresses several days a week and partaking in all manner of princess activities, accessories and toys.
â€œDisney Princess is a great brandâ€ and itâ€™s only a matter of time before Elsa and Anna, the stars of â€œFrozen,â€ get added to the lineup, said Jim Silver, editor in chief of TTPM.com, a toy website. â€œIt makes the toy wars a lot more interesting.â€
Hasbro won over Disney with what it has recently done in girls toys, especially Nerf Rebelle, and how it handled Disney properties Star Wars and Marvel, Chief Marketing Officer John Frascotti said in an interview. Rebelle is a toy bow-and-arrow line aimed at girls and was an offshoot of deep research Hasbro did into what makes todayâ€™s girls and moms tick, he said.
Girls and moms â€œdonâ€™t feel that traditional boundaries of what has been purely girl play or purely boy play should apply,â€ Frascotti said. â€œWe really felt there was an opportunity to bring some of our fresh thinking to these great brand franchises in Disney Princess and Frozen.â€ – AstroAwani