Toy News Review – 4/25/2018 – TRU buyout stumbles / Mattel Setup
Category : Blog
Its been a few weeks, and in that time, so much has come forward with toys. Two of the biggest stories are coming from separate ends of the industry and could have major consequences.
First off, the continued drama of Toys R Us keeps us on edge as the $900M bid by Isaac Larian, CEO of MGA, is denied as reported on the ICV2 website. Doing a little basic math would suggest that although $900M sounds like a good chunk of cash, that amount wouldn’t even put a dent on the estimated accrued interest for the past 10 years, let alone the value of the assets including inventory and land. Mr. Larian has told his legion of followers that he’ll continue to pursue an opportunity for a buyout. Whether Mr. Larian does or does not get the deal, he’s already won the hearts and eyes of toy lovers everywhere with his efforts. I sense this was part of the plan from the get go. Should TRU disappear, Mr. Larian has personally positioned himself to be the biggest marketing asset his company has with so many serious toy enthusiasts and industry professionals following him. It sounded a bit fishy when Mr. Larian made the call to the 30k TRU employees to follow him on LinkedIn. Of any toy CEO, he’s made the most noise in a positive way that’ll burn in the minds of all who work in the field.
Outside of the US, TRU has found saviors in key markets including Asia, Australia, Germany, Austria, Switzerland, and even Canada according to the source on ICV2 and cbc.ca websites. So, the brand will continue to live somewhere in the world.
Moving on to other news, major toy industry juggernauts are having a roller coaster of a time with announcements as Hasbro announces a $133M sales decline for the first quarter of 2018 vs 2017 with almost half as a result of the TRU closure, and Mattel announces its moving in a new CEO.
Hasbro confirms with a statement that the decline was anticipated, and precautions have been set in place to limit competition in Q1 and Q2 with the TRU liquidation and to expect some loss until 2019. The steady acquisition of clients over the last three years has opened over 20K new locations for Hasbro to help compensate for the TRU loss. I guess its no big shock there.
Mattel on the other hand, moved in a new CEO, Ynon Kreiz, former CEO and chairman of Maker Studios. Mr. Kreiz is bringing in a wealth of experience in media marketing and children’s entertainment which is something Mattel has lagged tremendously over the last few years to rival Hasbro. When seeing this post on linkedIn, commenters were quick to point out that Mr. Kreiz had extensive experience in dealing with Disney as many of his past companies were acquisitions to the mega-media company including Maker Studios and Fox Kids Group Europe. This setup could possibly position Mattel to be bought by Disney as its toy division that Disney, a division that has never really made a name for itself. It makes sense with the dying value of Mattel for Disney to swoop in and pick it up as many analysts feel its undervalued, and under the leadership of a proven business general, it should really be too long before it happens.
Lots of excitement in the air! Let me leave you with this bit of Japanese marketing genius. Should Japan do more of these commercials, they’d rule the internet.