The transition into full holiday mode begins after the last trick or treat; ABG makes yet another acquisition; Hasbro and Mattel report 3Q; Shark Tank star to launch magazine; and other licensing news highlights of the week.
Licensing, marketing and retail expert/opinion leader Tony Lisanti, provides insight and perspective for the top headlines of the week. “Licensing and Merchandising Report” is a must read for top execs who want objective, straightforward and authoritative analysis.
Let the Toy Wars Begin
While Halloween gears up for one final weekend of retail sales before the big trick or treat day, the month of November—including Black Friday, of course—is destined to become a strong sales period for major licensors and retailers, a clear barometer of the overall holiday season, and the beginning of a cutthroat holiday toy battle as retailers takes center stage in the post Toys ‘R’ Us era.
While Hasbro and Mattel reported declines in 3Q sales and are still feeling the effects of the Toys ‘R’ Us liquidation, the two companies continue to closely monitor sales as well as the new strategies and promotions among the top retailers. While sales were down, both companies remain optimistic for holiday as they attempt to overcome the TRU malaise.
Hasbro reported net revenues for the third quarter 2018 decreased 12% to $1.57 billion versus $1.79 billion in 2017. The company attributed the decline to lost Toys ‘R’ Us revenues. Net earnings for the third quarter 2018 were $263.9 million compared to $265.6 million last year.
Mattel reported net sales were down 8% to $1.44 billion versus the prior year’s third quarter.
On a more positive note, Hasbro reported net revenues for its Entertainment and Licensing segment increased 45% to $84.8 million compared to $58.4 million in 2017. Meanwhile, Mattel was bullish about the strong sales posted by Barbie in 3Q.
On a negative note, Hasbro is in the midst of major layoffs, which could be as much as 10% of the workforce of 5,000. Mattel previously announced layoffs of 2,200 employees or 22% of its workforce in July.
In addition to its holiday toy strategy at retail stores, Disney is also gearing up for the Mickey Mouse 90th anniversary, which takes the stage at theme parks from Nov. 16-18. In addition to major promotions and events, the global celebration will include various exclusive licensed merchandise and fashion collections such as Disney’s newest collaboration with retailer and brand Lacoste, which is celebrating its 85th anniversary. The line launches Nov. 1 with 30 SKUs of sneakers, leather goods, polos, sweatshirts, and accessories.
Here are some of the many toy related initiatives coming in November:
- On Nov. 16, FAO Schwartz will unveil the return of a 20,00-sq. ft. flagship store in Rockefeller Plaza that will focus heavily on licensed brands.
- On Nov. 2, Target will launch its bigger and better toy departments in 500 stores in hopes that the retailer can capture a large portion of the sales left behind by TRU. Target plans to offer more than 2,500 new and exclusive toys which is more than double last year’s selection.
- Party’s City will complete the transition of its Halloween City stores into Toy City stores in its strategy to capture toy sales. With 50 temporary Toy City stores, the specialty retailer has made a major commitment to test the market in hopes of capturing a large piece of the TRU sales pie and possibly expand the toy category year-round.
- There’s great anticipation for the Amazon toy catalog, which will be released in mid-November and, of course, create a highly competitive retail environment.
- Walmart also kicked off its aggressive holiday strategy with an expanded toy assortment by as much as 40% as well as numerous in-store events.
- Barnes & Noble will feature Dr. Seuss’s “The Grinch” this holiday season, with special displays in 536 stores featuring exclusive books, holiday ornaments, puzzles, games and toys, The book retailer will also be hosting a free Grinch Storytime on Nov. 3, ahead of The Grinchmovie debuting in theaters on Nov. 9.
ABG Acquires Home Brands
A few weeks after it announced the acquisition of the Camuto Group establishing a stronger presence in footwear and fashion apparel, Authentic Brands Group is building its portfolio in the home business. ABG, along with its partner Jay Schottenstein, outbid other firms for the IP of the Heritage Home Group which includes such classic brands as Thomasville, Broyhill, Drexel and Henredon.
With the majority stake in the acquisition, ABG has grown to almost $9 billion in annual global retail sales, nearly doubling in size from a year ago. The brand management company, which now has almost 50 brands in its portfolio and counting, is broadening its offerings and becoming a major partner for many retailers.
“This is a significant step in ABG’s development as the acquisition puts us firmly in the home furnishings business,” said Jamie Salter, chairman and CEO of ABG. “We’ve been looking at this sector for several months and the Heritage Home brands deliver against our strategic focus of both growing and diversifying the ABG portfolio. “Each of these brands has a unique history and tremendous consumer equity that positions them for global expansion.”
The sale is subject to approval by the bankruptcy court and is expected to be completed by year-end.
Major League Soccer Unveils Jersey Sponsorship
Major League Soccer has approved the sale of a sponsored sleeve patch on club uniforms beginning with the 2020 season. Clubs will now have the opportunity to secure a second sponsor on the right sleeve of the game jersey.
The patch will replace and measure roughly the same size as the existing MLS logo (approximately 2.5 by 2.5 inches). The sleeve patch will be available for a four-year pilot program and only to clubs that have already secured a primary jersey sponsor.
“The sleeve patch is a premium opportunity for brands to be connected with our League and clubs in mutually beneficial ways,” said Gary Stevenson, president and managing director, MLS business ventures. “As our league continues to expand, and with more fans in the U.S. and Canada viewing our matches, attending our games, and engaging on social media, the visibility of the sleeve patches will be substantial.”
Elise Contarsy Joins Bonnier
Former Meredith licensing exec Elise Contarsy has been named senior vice president of Bonnier Consumer Products. In this new position, Contarsy will be responsible for further developing Bonnier’s consumer products and brand licensing programs. She will report to Bonnier CEO, Eric Zinczenko.
“We have identified our consumer products and brand licensing efforts key to the diversification and growth strategy for our company,” Zinczenko said. “Elise brings an extraordinary resume of success in consumer products and licensing and I’m confident her industry experience, relationships with America’s top retailers and brand licensing strategies will be of great benefit to Bonnier Corp.”
Previously, Contarsy was vice president of brand licensing for Meredith from 2008 until March 2018 where she spearheaded the growth of Better Homes & Gardens licensing program to Walmart.
Earlier in her career, Contarsy was vice president and general merchandise manager of product development and branding for Bed Bath & Beyond and executive vice president of merchandising for Martha Stewart Living Omnimedia.
“I am thrilled to be joining Eric and the Bonnier team on the path to creating deeper consumer connections and growing non-advertising revenue,” Contarsy said. “The Bonnier portfolio of enthusiast brands has great potential to expand through strategic licensing and joint venture partnerships.”
Contarsy serves on the Board of the Licensing Industry Merchandising Association (LIMA) and is a consultant to the Private Label Manufacturers Association.
Bonnier’s portfolio includes more than 30 multichannel brands including Popular Science, Saveur, Field & Stream, Yachting, Flying, Salt Water Sportsman, Cycle World, Working Mother, and Outdoor Life.
Shark Tank Star Plans New Magazine
AMG/Parade and Lori Greiner are partnering to launch a new lifestyle publication called INSPIRE by Lori Greiner.
The 100-page glossy premiere edition will be distributed at key retailers for $4.99, with an initial print run of 150,000. It will hit newsstands in March 2019.
According to Tracey Altman, AMG/Parade Executive Vice President of New Ventures and Business Development, INSPIRE by Lori Greiner will feature inspiration, advice and insight on topics such as style, savvy shopping, money and investing, giving back, work/life balance, food and entertaining, health and beauty, and travel.
“I built my brand by helping budding entrepreneurs achieve the same success I’ve been lucky enough to enjoy,” says Lori Greiner. “I’m hoping my readers will connect with me in a whole new way through INSPIRE by Lori Greiner.”
Endemol Shine Extends Popular Shows
Endemol Shine North America announced new consumer products inspired by the popular series, Black Mirror and Peaky Blinders, which both air on Netflix.
The Black Mirror NOSEDIVE social board game and Loot Crate products as well as the Peaky Blinders 2019 Wall Calendar will be available for holiday.
“Black Mirror and Peaky Blinders have some of the most enthusiastic and dedicated fans in the world,” says Tamaya Petteway, SVP brand and licensing partnerships, Endemol Shine North America. “We are thrilled to bring these highly compelling and visually stunning shows to life by launching the first-ever series-inspired consumer licensing programs in the United States.”
NOSEDIVE is the first-ever social board game inspired by the Black Mirror episode of the same name. Modeled after the iconic episode starring Bryce Dallas Howard, players are challenged to create a “perfect” life by collecting Lifestyle Cards, while avoiding any “dings” to their Social Score. NOSEDIVE is produced by Asmodee and launches exclusively at Target Nov. 25.
Loot Crate, the subscription box service, January “Binge”-themed box will feature Black Mirror branded t-shirt, pair of socks and a collectible pin inspired by the Emmy Award-winning episode U.S.S. Callister.
NOSEDIVE and Loot Crate product debut follows the recent launch of Black Mirror-inspired apparel available exclusively at Target.
The Peaky Blinders 2019 Wall Calendar features series stars and fan favorites Cillian Murphy, Paul Anderson, Helen McCrory, Sophie Rundle and more. The large format, 18-month calendar also includes grids with ample room for jotting notes and reminders and six bonus months of July through December 2018 as well as moon phases, U.S. and international holidays. Calendars are now available at Amazon and Calendars.com.
In the aisles this week
Walmart is gearing up big time for a major toy push in typical style with merchandise stacked high and aggressively priced.
Worth reading this week
If you were concerned about the demise of TRU, the recent bankruptcy filing by Sears and the challenges facing other retailers, then read this analysis of Bed, Bath & Beyond in Forbes.