Brian Goldner makes his Toy Fair debut as the company's number-two executive, behind CEO Alfred J. Verrecchia

01:00 AM EST on Sunday, February 19, 2006

BY PAUL GRIMALDI
Journal Staff Writer

The first half of February is a grind for people in the toy industry.

The American International Toy Fair draws more than 20,000 people to New York City each year as toymakers show off their products for the coming year. The meetings, showroom tours and sales pitches stretch through a week of 12- and 14-hour days.

Pawtucket's Hasbro Inc., the nation's second-largest toymaker, again debuted a wide array of toys, games and gadgets to grab kids' attention.

This year, Hasbro also showed off its revamped management team, including Brian Goldner, the new chief operating officer.

Goldner introduced the company's product lineup to investors and stock analysts in advance of the Toy Fair's official opening last Sunday, followed by meetings with vendors, buyers and media people.

Alfred J. Verrecchia, Hasbro's chief executive officer, told investors that elevating Goldner is part of a plan to manage the company better and increase profits during a difficult period for the toy industry.

"We believe we need to do two things in order to accelerate growth," Verrecchia said. "First, we have to improve our brand management and our channel management capabilities. . . . Secondly, we need to stretch beyond our current boundaries."

The organizational changes that put Goldner in the company's number-two spot have been in the works for a number of years.

Alan G. Hassenfeld, a member of the company's founding familyand its non-employee chairman, along with Hasbro's board of directors, became concerned with the company's future leadership several years ago. Hassenfeld has always concerned himself with issues on the periphery of toy manufacturing, such as child welfare, and looked to do more work on them.

Hassenfeld's two grown stepchildren never worked for the company.

But Verrecchia is one of the family, in spirit if not in name.

The East Greenwich resident joined Hasbro in 1965 and has been with the company for nearly as long as Goldner has been alive. Verrecchia grew increasingly indispensable to the company and was architect of its restructuring in late 2000 -- focusing Hasbro on its core brands.

In 2003, when Verrecchia was promoted to be Hasbro's first non-family CEO, Hassenfeld said the choice was an inevitable recognition of Verrecchia's years of service and wise counsel.

"No matter what we went through, it was always Al who had his feet firmly on the ground," Hassenfeld told The Journal. "As I listened to different people, more than not I ended up taking more of the advice from Al than anybody."

Verrecchia's promotion was only one part of a broader succession plan.

Hasbro brought in Frank Bifulco, a former Timberland executive, as the number-two guy for E. David Wilson, then president of the U.S. Games group.

Goldner, a former advertising agency executive, was brought in to the Tiger Electronics division in March 2000 as chief operating officer. He was put in charge of its U.S. Toys group just a few months later.

Last August, Hasbro announced that the 56-year-old Hassenfeld would retire, taking on the moniker of non-employee chairman of the board. The move became effective last month.

That leaves Verrecchia, now 63, to groom his own replacement.

Bifulco was named president and chief sales officer of the Games unit and is responsible for sales and trade marketing throughout North America.

Hasbro alumnus Phil Jackson rejoined the company last month to be a senior vice president of marketing and product development.

The 42-year-old Goldner was tabbed as Hasbro's COO last month -- a role Verrecchia once held -- and is running the company's North American unit.

Promoting Goldner to COO clarifies Hasbro's succession plan in preparation for Verrecchia's eventual retirement. "He seems like he's the heir apparent," said Margaret Whitfield, a stock analyst with Ryan Beck & Co.

In contrast to Verrecchia's steady march up the corporate mountain, Goldner looks as if he's sprinting toward Hasbro's lead.

A 1985 graduate of Dartmouth College, the Huntington, N.Y., native entered the toy business after more than a decade in advertising.

He was working for a division of J. Walter Thompson Co. in 1997 when he jumped to one of its clients -- Bandai America Ltd. -- the company that brought Mighty Morphin Power Rangers and Digimon to the world.

In March 2000, Goldner switched companies again, leaving Bandai America for Tiger. After first working for Hasbro in Chicago, Goldner moved to Rhode Island in 2001. He lives in Barrington with his wife, Barbara, and their two children.

Verrecchia is credited by industry observers with being sharply analytical and in command of Hasbro's operations and finances.

Toy industry analyst Chris Bryne said Goldner's team-oriented approach will aid him as he assumes more responsibility at the $3.6-billion company.

"I think he's a guy who surrounds himself with people who know things he doesn't," Bryne said. "When I've been up there, his people are really happy to see him and they enjoy working with him."

Goldner said he likes to be clear about his organizational goals. "Everybody on my team knows what the play is," he said.

Goldner's advertising background gives him a good handle on consumer sentiment, Bryne said. "Brian's expertise is understanding consumer behavior."

Verrecchia said Goldner "has been at the forefront of Hasbro's drive to bring innovation and growth to the toy industry and his tremendous experience and entrepreneurial spirit will serve him well in his new role."

Goldner said his management style will work well with Verrecchia's.

"I think that Al and I have very complementary skill sets," he said.

Verrecchia's long-term strategy for Hasbro includes generating profits by relaunching the company's core brands in new formats and new mediums.

Some of these product extensions include this year's reintroduction of Baby Alive, following the previous return of My Little Pony, the remodeling of Monopoly for its 70th anniversary, and the release of the 20th Anniversary Edition of Trivial Pursuit.

The strategy generally earns Hasbro a steady stream of money as revenues from other toys -- such as Star Wars merchandise and the spinning top Beyblade -- wax and wane.

Hasbro once appeared trapped into buying licenses of movie properties to make money. To lock up its license to produce Star Wars-related merchandise, Hasbro's original deal with filmmaker George Lucas could have given him 8-percent ownership of the company, close to the 10 percent Hassenfeld controls.

Now, Hasbro is limiting license revenue to less than 12 percent of sales.

The company walked away from a deal to produce toys and games tied to the Batman movies because, Goldner said, "It didn't feel right to us at the time. It's got to be the right license at the right price at the right time."

Instead, he reiterated Verrecchia's strategic statements.

"We will continue to focus on our own and operated brands," Goldner said.

Hasbro is producing a live-action movie based on its Transformers toys in conjunction with Paramount Pictures Corp. and DreamWorks Pictures. The arrangement gives Hasbro some control over the movie and a broader earning potential than the Star Wars license. The movie is due out this summer.

Hasbro is mining other parts of the fragmented media industry for revenue, putting brand-name products such as Nerf and Monopoly, and others, in front of consumers on cable television, cell phones and computers. A Transformers video game is timed for the movie's release in July.

"It's only natural that they'd move more into the digital area," Bryne said, as toy companies follow children online and down the consumer electronics aisle. "The challenge for them is going to be a competitive one."

The toymaker recently announced a deal with G4, which bills itself as a video-game lifestyle cable network, to create Hasbro-centric television programs.

"G4 is yet another example of our desire to take our brands and build an immersive experience for them," Goldner said. "It helps us be everywhere consumers are."

Not content to let electronics makers Apple, Microsoft or Sony steal its young customers, Hasbro rolls out gadgets aimed at tweens -- 8- to 12-year-olds. The company introduced VideoNow and the I-Dog at previous Toy Fairs.

This year's leading entry is Zoombox -- a device that can beam DVD and video-game images up to 60 inches wide onto walls and ceilings. The device retails for $250. They've also followed up the popular I-Dog with the I-Cat -- a feline version of its canine-shaped digital music player.

"We're really tapping into tweens' desires for electronics," Goldner said.

But the drive into electronics will only go so far, he said. "We're not going to become a consumer electronics company."

Goldner wouldn't describe his vision for Hasbro beyond that intention. "We're still in the early innings," he said.

"Time will tell" whether Goldner goes the distance at Hasbro, said Whitfield, the stock analyst.

pgrimald@projo.com / (401)-277-7356

Biography

AGE: 42

HOMETOWN: Huntington, N.Y.

CURRENT: Lives in Barrington with his wife, Barbara, and two children

COLLEGE: Bachelor's degree in government/economics, Dartmouth College, 1985

EXPERIENCE:

2006 - Named chief operating officer of Hasbro Inc.

2000 - Named president of Hasbro's U.S. Toy Group

2000 - Joined Hasbro's Tiger Electronics division as chief operating officer

1999 - Named chief operating officer of Bandai America

1997 - Joined Bandai America Inc.

1997 - Named senior partner of JWT/Entertainment, a division of the J. Walter Thompson Co. advertising agency.

Prior to joining J. Walter Thompson in the mid-1990s, Goldner also worked for ad agencies Lowe and Partners and Leo Burnett Advertising

INTERESTS: Biking, boating, running and skiing