China Toy Fair


Minecraft Will Join Microsoft Studios

Minecraft-gamesMicrosoft Corp. has reached an agreement to acquire Mojang, the Stockholm-based game developer behind the popular Minecraft franchise.

Under the terms of the agreement, the Mojang team will join Microsoft Studios. Microsoft will acquire Mojang for $2.5 billion, and expects the acquisition to be break-even in fiscal year 2015 on a GAAP basis. Subject to customary closing conditions and any regulatory review, the acquisition is expected to close later this year.

Available across multiple platforms, players have downloaded Minecraft more than 100 million times, on PC alone, since its launch in 2009. Minecraft is also the most popular online game on Xbox, and the game’s community is among the most active in the industry, with more than 2 billion hours played on Xbox 360 alone in the past two years. [Read more...]

Thanks to The Lego Movie, Lego Is World’s Largest Toy Maker

LEGO_LogoAs reported by The Wall Street Journal today, Lego is currently the world’s largest toy maker.

Denmark’s Lego A/S said that revenue during the first six months rose 11 percent, boosted by The Lego Movie products. This makes Lego the biggest toy company in the world in terms of both revenue and profit, ahead of Mattel Inc. The jump also puts Lego slightly ahead of Mattel in sales for the first six months of the year.

A sequel to The Lego Movie, The Lego Movie 2, is scheduled for release in 2017, and Warner Bros. has already set the release for the Ninjago movie next year.

The licensing of the movies themselves isn’t a significant element of sales for Lego compared with the sales of movie-related boxes of bricks. Overall first-half sales for Lego rose to 11.5 billion Danish kroner ($2.03 billion) from 10.4 billion kroner in the same period last year, the company said. [Read more...]

Toys “R” Us Inc. Reports Second Quarter Financial Results

ToysRUsLogo copyToday, Toys “R” Us Inc. reported financial results for the second quarter ended August 2. Consolidated net sales were $2.4 billion, an increase of 2.7 percent versus the prior year period. Excluding the impact of foreign currency translation, which increased net sales by $7 million, the company experienced an improvement in net sales of $56 million, or 2.4 percent. The growth was primarily a result of an increase in comparable store net sales in both the Domestic and International segments, as well as new stores in the International segment.

Second quarter highlights include domestic comparable store net sales up 1.5 percent, primarily driven by increases in the core toy, learning, and entertainment (which includes electronics, video game hardware and software) categories. International comparable store net sales were up 2.5 percent primarily due to increases in the core toy, learning and seasonal categories.

Adjusted EBITDA was $81 million, compared to $74 million in the prior year, an increase of $7 million, or 9.5 percent.

Alleghany Capital Corporation Invests in Jazwares

jazwaresAlleghany Capital Corporation (ACC), a wholly owned subsidiary of Alleghany Corporation, has acquired an interest in Jazwares LLC.

Judd Zebersky, CEO and president of Jazwares, commented, “Jazwares has grown significantly over the past number of years by delivering high quality, must-have toys and consumer electronics to children worldwide. As we pursue our next stage of growth, we are enthusiastic to partner with ACC given its unique long-term perspective and history of backing entrepreneurial management teams.”

Valufinder Group Inc. acted as financial advisor while Seyfarth Shaw LLP acted as legal counsel to ACC. Marketing Management Group Inc. acted as financial advisor and Pryor Cashman LLP acted as legal counsel to Jazwares.

Mattel’s First Quarter Results Include Gross Sales Decline for Top Brands

logo_Mattel logoMattel reported 2014 first quarter financial results, which included a decline in worldwide sales for Barbie, but strength in some of the company’s other girls brands.

For the first quarter, worldwide gross sales for Mattel girls and boys brands were $656.9 million, down 5 percent versus the previous year. This included a decline in worldwide gross sales for the Barbie brand of 14 percent. Worldwide gross sales for Mattel’s other girls brands increased 4 percent on the strength of Disney Princess and Ever After High, partially offset by Monster High. [Read more...]

Toys “R” Us Executives Outline TRU Transformation Strategy

toysrusToys “R” Us Inc. executives recently outlined a four-point strategy, entitled TRU Transformation, intended to improve the company’s operational performance. At presentations for investors, industry analysts, and the media this past Wednesday, Toys “R” Us chairman of the board and chief executive officer Antonio Urcelay and president Hank Mullany discussed priorities and actions intended to slow the company’s sales decline, stabilize cash flow, and improve EBITDA to effectively position the company to grow revenue and profits next year and beyond.

“As we look to the future, our strategy will establish a path to sustainable business growth, building upon the company’s unique strengths,” Urcelay said.

TRU Transformation will focus on four key priorities: [Read more...]

NPD Reports Xbox One and PlayStation 4 Powered Video Game Sales

According to the U.S. Games Industry Sales analysis by The NPD Group’s Liam Callahan, February hardware sales increased by 42 percent over the prior year, due to a more than 60 percent increase in console hardware sales. These strong year-over-year increases are due to the success of the Xbox One and PlayStation 4.

The analysis also showed that total video game sales in February were $887 million, a change of 9 percent compared to February 2013. This is credited to strong growth in hardware and a slight rise in accessory sales. Total software sales—across the console, portable, and PC categories—were [Read more...]

Uncle Milton Sold by Transom Capital Group

As reported by Transom Capital Group, Uncle Milton Industries Inc. has been sold to KCB Management. Founded in 1946, Uncle Milton creates, develops, and markets science and nature-based toys, including the company’s flagship Ant Farm, to children of all ages.

“The strides that Uncle Milton has made under Transom Capital’s ownership cannot be understated,” said Uncle Milton president Frank Adler. “Without a doubt, Transom Capital has been a key strategic sounding board to Uncle Milton’s management team.”

Uncle Milton’s portfolio includes such licensed product lines as the In My Room, Star Wars Science, and National Geographic brands. Terms of the transaction were not disclosed. The sale of Uncle Milton represents Transom Capital’s second successful exit during the past 12 months.

Mattel to Acquire Mega Brands

logo_Mattel logoMattel Inc. and Mega Brands Inc. have signed a definitive agreement for Mattel’s acquisition, through a wholly owned subsidiary of Mattel Inc., of Mega Brands for $460 million.

The acquisition advances Mattel’s global growth strategy of building upon its world-class portfolio of brands by expanding into two of the fastest-growing toy categories. Mega Brands is the No. 2 player in the $4 billion construction building sets category with its Mega Bloks brand, as well as a competitor in the $2 billion arts and crafts category.

mega brands logoMattel’s portfolio of brands will complement Mega Brands’ flagship Mega Bloks brand and existing licensed brands, including Halo, Skylanders, Call of Duty, Assassin’s Creed, Power Rangers, Hello Kitty, and SpongeBob SquarePants. The acquisition will give Mattel the opportunity to broaden its relationship with its entertainment partners.

Mega Brands ranks among the top 15 toy companies globally in terms of sales, according to statistics published by The NPD Group last year. Additionally, the company achieved record sales of preschool construction toys. [Read more...]

Toys “R” Us Reports Holiday 2013 Sales Results

Toys “R” Us Inc. has reported its comparable store net sales for the five- and nine-week periods ending January 4.

For the five-week period, the domestic segment reported a comparable store net sales increase of 1.8 percent. The learning, seasonal, and core toy categories generated the strongest comparable store net sales growth. Internationally, comparable store net sales declined 1.1 percent for the five-week period. Australia, China, and Southeast Asia experienced positive comparable store net sales growth, offset by softness in Japan, Canada, and Europe.

Comparable store net sales for the nine-week period decreased 4.7 percent in the domestic segment and 3 percent in the international segment. The nine-week domestic comparable store net sales change is lower than the five-week change, due mainly to the late timing of Thanksgiving this year versus the prior year, which partially benefitted the current year five-week period. Internationally, Australia, China, and Southeast Asia experienced positive comparable store net sales growth, offset by softness in Japan, Canada, and Europe.

The five-week period refers to December 1, 2013 to January 4, 2014, as compared to December 2, 2012 to January 5, 2013 in the prior year. The nine-week period refers to November 3, 2013 to January 4, 2014, as compared to November 4, 2012 to January 5, 2013 in the prior year.