Tech 4 Kids and The Bridge Merge

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Strategic Partnership Aims to Yield Growth and New Opportunities

The toy industry is known for its mergers and acquisitions. They say no one leaves the toy industry—they just move around. One of the main reasons for this is the opportunity for growth. While some companies grow slowly but steadily with a hit here and a hit there, some of the most successful companies in this industry got to where they are via strategic acquisitions or mergers. Toy industry giants such as Mattel, Hasbro, Spin Master, and Jakks Pacific show how vital these moves are to taking a company to the next level.

The first, critical step is finding a complementary, like-minded company with which to merge. Brad Pedersen, president and CEO of Tech 4 Kids, and Jay Foreman, president and CEO of The Bridge Direct, met at toy industry event PlayCon several years ago, where they were introduced by a mutual colleague.

“This is a very social business, and while we all compete in some way, there are always opportunities and synergies that like-minded people can find to make their businesses stronger,” says Pedersen.

This year, Pedersen and Foreman will merge The Bridge Direct and Tech 4 Kids into a new company focused on classic play. The new company will have an entirely new name (yet to be determined), and will be managed in North America and Hong Kong by an experienced team made up of executives from both companies. Foreman will be CEO, and Pedersen will serve as the president of the new company. The head office will be in Boca Raton, Fla., “which has become a micro-hub of the toy industry,” according to Foreman. The company will also continue to operate Tech 4 Kids’ Canadian office, and will consolidate the Hong Kong offices into one operation to maintain and grow that space.

Pedersen says that the companies have already started to integrate the operational side of the businesses, and, over the next 100 to 200 days, plan to merge more functions together to begin to operate as one. While each company will operate out of its respective gallery at the North American International Toy Fair, the companies will come together under one roof at Fall Toy Preview in Dallas this October.

The Bridge Direct and Tech 4 Kids are both traditional toy companies, and the merged company will remain a multi-line traditional toy business, “playing in a variety of product categories both large and small, taking senior as well as ancillary support positions in categories,” says Foreman. “We will look to consolidate product lines where it makes sense, but expect that the combined portfolio will create a much more robust offering for the market. The plan is to merge operational efficiencies but look to continue to grow our existing product lines and expand our portfolio into other high-volume categories. The key will be to offer the trade highly desirable product at great margins and superior value to the consumer.”

The company will continue to offer toys in the impulse collectibles, retro, construction, and activity toy categories, according to Pedersen. “We want to continue to develop and innovate new product concepts to drive organic growth, while at the same time pursue an aggressive acquisition strategy,” he says. “Our strategy is to more fully leverage the complementary distribution channels, develop accretive, parallel channels, and drive acquisitions,” he explains.

So, why now? “This industry continues to change at a rapid pace,” says Foreman. “It’s come to a point where many of the key stakeholders, including retailers, licensors, and vendors are looking to do more business with fewer partners. The overall key motivation for this opportunity is how hard it is to compete in today’s increasingly competitive retail landscape as a sub $50 million company. You simply don’t have the critical mass to compete on a large enough scale and be the best you can be to customers and partners. By scaling up, this opportunity will let us do just that—our weakness becomes our strength.”

“With added scale, we believe we will accelerate the growth of our value proposition for retailers,” adds Pedersen. “Both companies enjoy a good reputation for providing innovative products, driving sales with effective marketing, shipping on time, and delivering good margins. We will deliver on a more meaningful basis all the things our customers are looking for in a partner.”

While the new company has no plans for an IPO in the near future, there will be an opportunity for private equity firms. “We will become a new strategic player in the business for financial firms that have invested in small to mid-size toy companies,” says Pedersen.

In the near-term, Foreman says the main focus is on a smooth integration and seamless transition for the companies’ partners. Once the company is on solid footing, the door will be open for acquisitions of smaller cap toy companies, with the goal of merging with or acquiring a new company every six to 18 months.

For Pedersen and Foreman, this is the first step toward an even bigger future. “The new combined company will put us in the top 30 toy manufacturers, globally,” says Pedersen. “In less than three years we expect to be in the top 15, and in five years, we will be in the top 10!”

The Bridge Direct Promotes Senior Executive Stephen Chernin to Company President

The Bridge DirectThe Bridge Direct promoted senior executive Stephen Chernin to company president effective immediately. In his new role, Chernin will continue to manage all aspects of The Bridge Direct’s business, including Basic Fun and Good Stuff divisions. All sales, marketing, and licensing teams will report directly to Chernin.

Previously, Chernin was the executive vice president of Basic Fun and Good Stuff divisions for 15 years. Chernin was instrumental in forging licensing partnerships and spearheads global sales efforts in Hong Kong.

Moose Toys Announces 16 New Shopkins Licensees for the U.S. and Canada

ShopkinsLogoMoose ToysShopkins licensed merchandise program for the U.S. and Canadian market has made deals with 16 additional licensees, bringing its total licensee count to 25.

The Licensing Shop Inc. brokered the new deals, and licensees for toys and games include the following:

[Read more...]

Q&A with Jay Foreman, President and CEO, The Bridge Direct

resized,TheBridge.JayForemanThe Toy Book (TTB): Which licenses do you anticipate will be key drivers in 2015?

Jay Foreman (JF): I think everyone would agree on Marvel’s The Avengers, Frozen, Cinderella, Minions, and Star Wars, along with Teenage Mutant Ninja Turtles; however, there are a few nontraditional brands emerging from toy companies, like Shopkins, that should be considered.
[Read more...]

WIT Presents Awards to Women Leaders at Annual Wonder Women in Toys, Licensing, and Entertainment Dinner

WIT.logoWomen leaders were honored by more than 500 industry executives at the 11th Annual Wonder Women in Toys, Licensing, and Entertainment (WIT) Awards Dinner, which took place on Sunday night. Hosted by WIT, and coinciding with the North American International Toy Fair in New York City, the gala awarded winners from more than 40 distinguished nominees from around the world. WIT also presented Special Honoree Awards to executives from Sesame Workshop, amazon.com, and Disney Consumer Products. [Read more...]

AG Properties Launches Strawberry Shortcake Program in Nordic Region

strawberry shortcakeStrawberry Shortcake will see a dramatic expansion across Denmark, Finland, Norway, Sweden, and Iceland this fall, thanks to a new licensing deal between AG Properties (AGP) and strategic partner Tactic Games. They will produce and distribute a variety of publishing products, games, and puzzles, and will serve as distributor in the Nordic region for the new core toy line produced by The Bridge Direct featuring all new packaging.

The deal was handled by local agent Alicom Licensing acting on behalf of AGP.

All products will be distributed via direct selling, book clubs, specialty stores, book stores, supermarket and grocery, hypermarket, mass market, department, duty-free stores, game specialty, novelty, and toy stores.

License to Build: Familiar Properties Fill Up the Shelves of the Construction Aisle

This article was originally published in the July/August 2014 issue of The Toy Book. To read the entire digital issue, click here.

The construction play pattern has always allowed kids to create buildable worlds and adventures straight from their imaginations. But with a recent surge of licensed toys entering the category, kids are able to build more and more familiar worlds based on their favorite existing properties. According to The NPD Group, dollar sales of licensed building sets grew by 6 percent from 2011 to 2013. As the world becomes more multi-media driven, licensed properties are deeply integrated into kids’ daily lives. Established building toy companies, as well as those looking to get their feet wet in the category, are jumping on the bandwagon with characters and environments that are already a staple among kids—and even collectors. [Read more...]

Warner Bros. Consumer Products Brings Godzilla-Sized List of Licensees to Toy Fair

WB Consumer ProductsWarner Bros. Consumer Products (WBCP) enters this year’s American International Toy Fair with an extensive lineup of global licensees in support of its entertainment properties, milestone anniversaries, and upcoming theatrical releases.

Bandai America Inc. and Jakks Pacific Inc. will each support Godzilla, from Warner Bros. Pictures and Legendary Pictures, with new toy lines. Jakks’ line of Godzilla products will include an Ultimate Large Scale Godzilla Figure with 12 points of articulation and a length of over 43 inches, making it one of the largest toys in Godzilla history. Other worldwide partners include Rubie’s Costume Co., NECA, and Sideshow Collectibles.

WBCP’s toy partners will also release toys and collectibles based on The Hobbit Trilogy. The Bridge Direct and Vivid Group will support the film series with new figures. Additional partners include Eaglemoss, Funko, Kosmos, and Ravensburger.

The Wizard of Oz will celebrate its 75th anniversary with Mattel‘s new line of dolls for The Wizard of Oz Barbie collection. Enesco, Tonner Doll, and Madame Alexander will each offer collectible figures. Warner Bros. will also continue its There’s No Place Like Home campaign in partnership with Habitat for Humanity. Gone with the Wind will also mark its 75th anniversary with new collectible figures from Madame Alexander and Tonner Doll. Mattel will offer an anniversary Barbie collection and Enesco will introduce a stone resin figure. [Read more...]

GP Flair Distributes WWE Construction Toys, Play Sets from The Bridge Direct in UK, Ireland

wweGP Flair has announced that it will be the new UK and Ireland distribution partner for a new range of WWE construction figures and play sets. The new collection, manufactured by U.S. toy company The Bridge Direct, is expected in stores in the late summer.

Designed and manufactured by the Bridge Direct, under the banner “C3” (create, construct, and connect) the new collection will include universally compatible building bricks and accessories that can be constructed into WWE rings, as well as WWE Superstars. At launch multiple SKUs will be available with more in the pipeline for subsequent seasons.

Warner Bros. Consumer Products Unveils Worldwide Licensing Program for The Hobbit: The Desolation of Smaug

TheHobbit

Warner Bros. Consumer Products has teamed up with their global licensees to create an array of offerings inspired by the second film of The Hobbit Trilogy, The Hobbit: The Desolation of Smaug, a production of New Line Cinema and Metro-Goldwyn-Mayer Pictures (MGM). Global licensees include partners across multiple categories, including toys, apparel, and publishing.

Co-master toy licensees The Bridge Direct and Vivid Group will offer an assortment of detailed action figures, collector’s figures, and role play accessories that bring the films’ characters and epic quests to life. Also supporting the film are Lego with adventure-filled building sets, physical effects house Weta Workshop with replicas based off of those Weta created for the film, The Noble Collection with high-end collectibles, Ravensburger with puzzles, HarperCollins Publishers with detailed companion books, Bioworld with apparel for all ages, and Rubies Costume Co with costumes, accessories and dress-up clothes, among others. Products inspired by the film will be available at retailers worldwide, with select offerings also available at HobbitShop.com.