Business

Hasbro will expand its brands, rely less on licensed toys

01:00 AM EST on Monday, February 19, 2007

BY HEATHER BURKE

Bloomberg News

Hasbro Inc., the world’s second- largest toymaker, will expand its core brands such as Playskool and Transformers this year and rely less on licensed toys from movies such as Star Wars, chief executive officer Alfred Verrecchia said.

“We’ve been focusing on driving our core brand of products so we’re not dependent on licensed products from year to year,” Verrecchia said last week in an interview in New York.

Hasbro plans to add more Playskool preschool products, girls’ toys and electronic gadgets.

Developing toy lines owned by Hasbro is more profitable and less volatile than relying on licensed movie-based toys such as Star Wars whose sales can rise and fall based on a film release.

The company later this year will introduce a line of Transformers products, a brand it owns. They are tied to a movie produced by Steven Spielberg, which is scheduled to be in theaters July 4.

The Pawtucket-based company will also sell a parrot that mimics words and dances, a follow-up to last year’s $299 life-sized Butterscotch pony. Butterscotch was named Girl Toy of the Year on Feb. 10 by the Toy Industry Association.

Shares of Hasbro, which also makes Nerf sports equipment and G.I. Joe action figures, rose 16 cents Friday in New York Stock Exchange composite trading, to close at $29.60.

Hasbro and other toymakers introduced their new products last week at the American International Toy Fair in New York.

Licensed toys account for 10 percent to 20 percent of toy sales, down from as much as 30 percent in 1999 and 2000, Verrecchia said. Hasbro this year will add electronic toys and more girls’ toys, such as Baby Alive and Littlest Pet shop, he said. Mattel Inc. is the world’s largest toymaker.

“Any company would rather own its own intellectual property,” said Bob Goldsborough, who helps manage $16.3 billion in assets at Ariel Capital Management in Chicago. “It’s not dependent on a particular movie series. You also capture all of the profits yourself.” His firm owns 7.1 million Mattel shares and used to own Hasbro.

Hasbro will add its first Internet-based game system and an MP3 digital-music player geared toward infants and toddlers as children turn to electronic gadgets from traditional toys.

Hasbro has sold more than 1 million copies of the new Monopoly Here & Now board game, Verrecchia said. The edition, which came out in September, replaced Boardwalk and other game-board spaces named after sites in Atlantic City, N.J., with landmarks from U.S. cities, such as the White House.

A new Monopoly version this year replaces cash with a debit card, as well as the first DVD edition. Hasbro will also roll out updated versions of the Game of Life and Operation this year.

“The consumer still likes board games, they’ve been up on average about 4 percent,” Verrecchia said in a televised interview.

Hasbro owns the rights to sell light sabers, action figures and other toys based on Star Wars movies. Revenue from this line fell 42 percent last year to $284.9 million. The last film, Revenge of the Sith, hit theaters in May 2005. New products this year to commemorate the 30th anniversary of the first Star Wars include a line of action figures with 60 collectible coins.

There’s also new toy lines based on Spider-Man, Fantastic Four and other Marvel Entertainment Inc. comic-book characters as part of a five-year agreement reached last year. The Spider-Man 3 film is set for release in May.

Hasbro reported Feb. 9 that fourth-quarter profit rose 15 percent, beating analysts’ estimates, on higher sales of board games.

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