Date: Sunday, December 16th 1990 12:01am CST
Category: Site Articles
Posted by: Seibertron Permanent Link
Views: 826,669
Written by Karen Schwartz for the Associated Press
Pawtucket, R.I. -- After years of battling for control of the universe, Transformers, those toy robots that can change form, may have met their demise from sagging sales.
Hasbro Inc., which made nearly $950 million selling Transformers over the past seven years, is re-evaluating whether domestic demand is strong enough to justify costly promotion, company spokesman Wayne Charness said last week.
"Certainly Transformers had a fantastic run, and we are going to review whether the run continues or whether it goes away," he said.
Hasbro kept the heroic Autobots and the evil Decepticons going for years by inventing and supplying weapons for both sides of the Transformers battle. It also developed a complicated story line of a futuristic mechanical being that crash-landed on Earth in search of fuel and power supplies.
In its heyday in 1985, Transformers generated about $333 million for Hasbro, accounting for 27 percent of the company's annual net revenue. This year, the product is expected to garner only about 2.4 percent, or $35 million.
Hasbro worldwide net sales should total about $1.46 billion this year, up from about $1.41 billion last year, said Gary Jacobson, toy industry analyst for Kidder, Peabody & Co. of New York.
Charness said such staples as GI Joe and Cabbage Patch Kids dolls continue to be top sellers, along with new items such as New Kids on the Block dolls and World Wrestling Federation figures.
Transformers continue to sell well in other countries, where the toys were introduced more recently, Charness said. A decision on the future of Transformers in this country should be made shortly, he said.
"With any product you'd love to have it last forever and ever," he said. "Our job (is)... to give it as long a life as it can."
If Hasbro decides to discontinue U.S. sales of Transformers, it will end one of the toy industry's biggest success stories in years.
"It had a terrific run," said Paul Valentine, a toy industry analyst at Standard & Poor's Corp. of New York. "It was one of the major hits of the 1980s."
Another industry analyst, Sean McGowan of Gerard Klauer Mattison & Co. of New York, said: "The question of Transformers is not 'Why did it die?' but 'Why did it live so long?'"
The answer lies, at least in part, in Hasbro's marketing strategy. The Pawtucket-based company constantly updated the line with new figures and vehicles. It offered various models to appeal to different pocketbooks. And there was a Transformers television cartoon show and a movie.
Over the years, Hasbro became less agressive about marketing the figures.
"We certainly continued to support Transformers but not at the level we did when it was the most popular toy in the country," Charness said.
The line of toy robots arrived in 1983 when it was unveiled at the annual toy fair in New York by the Japanese toy company Takara.
Hasbro worked out a licensing arrangement with Takara. Meanwhile, Tonka Corp. of Minnetonka, Minn., introduced a competing line, GoBots, in early 1984.
"Although Transformers appeared five months after GoBots, Hasbro came from behind and outsold GoBots almost 2-1," according to the book "Toyland: The High Stakes Game of the Toy Industry."
Transformers generated about $111.6 million in sales that year.
"I think it really brought a fun new play to toys," said Charness. "The whole transformation theme -- it was an exciting one for kids, and I think done well it continues to be."
Editor's Note: This newspaper article was obtained through Linden High School's micro-fiche film library during my senior year in 1995. Linden High School is located in Linden, Mi. See ... it pays to save all that stuff!!!
Date: Sunday, December 23rd 1984 5:24pm CST
Category: Site Articles
Posted by: Seibertron Permanent Link
Views: 916,106
Written by Hamilton Allen for the Providence Journal
PAWTUCKET - In September, it bought a company that had been losing money. Some observers said the deal was no bargain.
In October, its new president - on the job less than three weeks - resigned.
In November, it announced plans to shut a major plant and move its operations to other states; at least 450 people would lose their jobs.
But don't get out the handkerchiefs. This is Hasbro Bradley Inc., which probably has done more to put Pawtucket on the business map than any other company since Samuel Slater built his mill.
It was in September that Hasbro, a 48-year-old company with 2,000 employees, acquired Milton Bradley, a 124-year old game and puzzle maker with 4,000 employees and operations in 14 foreign countries.
The acquisition, merging two familiar names in the toy and game trade, created one of the largest toy and game manufacturers in the nation. It may soon be the largest.
"If Hasbro isn't number one, they'll be a very close second I'll tell you," said Stephen F. Smith, editor in chief of Toy & Hobby World, the industry's most widely circulated trade publication. Just how large that will be will be decided early next year when annual sales figures come out.
Stephen Hassenfeld, Hasbro's chairman, says sales are now running at the rate of $875 million annually. For 1984, however, total sales will be less because Milton Bradley's contributions are limited to the last six months of 1984.
Even so, the numbers reflect an increase of major proportions: Sales of $138 million two years ago, $730 million this year; net income of $7 million two years ago, $48 million this year.
That assures Hasbro a berth in the Fortune 500 - the annual listing of the 500 largest US industrial corporations, based on sales. The only Rhode Island company now on that list is Textron, the Providence-based conglomerate. Nortek, a diversified manufacturer now moving from Cranston to Providence, is also likely to win a place on the list. It expects sales of more than $500 million for 1984.
Hasbro's growth in business means growth in the managerial, executive and professional staff. The company added about 200 to its Pawtucket staff this year and will probably add another 200 in 1985, Hassenfeld said.
In a state as small as Rhode Island, that can have a significant ripple effect on real estate, grocery stores and other consumer goods and services.
Some of Hasbro's growth results from the acquisition. A number of people coming to the Pawtucket area to live are moving from the former Milton Bradley headquarters in Springfield, Mass., and from the former Chicago headquarters of Playskool, a Milton Bradley subsidiary.
But growth at the home office in Pawtucket also reflects internal growth. Before the merger on September 10th, Hasbro's administrative and professional staff in Rhode Island had increased by 105 this year, Hassenfeld said.
Hasbro is now working to accommodate the staff increase. Most of the people new to the home office will work at headquarters, thus displacing manufacturing space there.
Manufacturing is to move to a Hasbro building on Delta Drive, off Armistice Boulevard in Pawtucket. The building is now used for warehouse and distribution functions, which will be moved to West Warwick where Hasbro has leased more than half (260,000 square feet) of the BIF building off Route 95.
Meanwhile, the former Milton Bradley headquarters in Springfield, Mass., is for sale.
Hassenfeld, 42, grandson of one of the company's founding brothers, occupies an office that is unusually spare - no pictures on the wall, no drapes at the windows, little furniture. Magazines sit in stacks by the dozen on the floor and a large conference table.
He's running an hour late as he summarizes the benefits he expects from the Milton Bradley purchase.
- The opportunity to be more significant in the pre-school market. The company will take the best of Hasbro's traditional preschool line and the best of Playskool, discarding the rest. Playskool will probably be the name for the combined line.
- The opportunity to be more significant in the global market. Milton Bradley's foreign manufacturing and sales had given the company 37 percent of total sales. Hasbro, which only had plants in Canada and England, can now sell toys through the Milton Bradley network.
- A broader project line. If Hasbro can get several popular toys on the store shelves, it can continue to reduce dependence on one or two high-volume toys. Hassenfeld says he seeks diversity the same way an investor seeks to balance his securities portfolio. Too many toy and game companies, he says, rely on a single product and then aren't able to resist any kind of a down draft in sales of those products.
He cites the G.I.Joe toy line, the company's most popular product, as an example.
"Joe," as he's known at headquarters, contributed 40 percent of total sales two years ago. Hassenfeld confesses that while he loved Joe's success, Hasbro's dependence on the toy "made me nervous."
This year, Joe will capture $125 million in sales - but that's only 17 percent of total estimated sales.
The merger is now more than three months old, but the effort of bringing two large companies together has had its rough spots.
There was the matter of James J. Shea Jr, son of a Milton Bradley chairman. Shea, at 58, was himself chairman, president and chief executive officer of Milton Bradley at the time of the acquisition.
On September 10th, with the merger completed, he was named president and chief operating officer of Hasbro Bradley.
Less than three weeks later, Shea announced his resignation. The slot was immediately filled by Alan G. Hassenfeld, 36, younger brother of the chairman, who had been executive vice president.
"I would have liked it to have worked out differently," Stephen Hassenfeld said. "It didn't, and it surprised probably no one; it didn't surprise anyone in the industry."
Shea, he said, is a man "whose style is quite different from mine. I tend to run things on a much more participatory basis, but that doesn't mean that his style was wrong. Obviously, he is a very talented individual. But I can understand the problems somebody has in going from a chief executive officer of a big company like that to a number two position.
"After all, if somebody came along and took away my opportunity to be the lead person in interfacing with Wall Street, to be the one responsible for mergers and acquisitions, to be the interface with the board of directors, well, that's taking away a big piece of everything that you've trained for.
"All that was defined up front. YOu can't have two people doing the same work. And as part of the acquisition, it was defined that I would do all those things. Nonetheless, it left him all of a sudden without things he was used to doing."
If anything triggered the resignation, it apparently was a dispute over Playskool. It was Shea - not Hassenfeld - who first wanted to close the Playskool plant in Chicago. Shea had made this known last spring around the time plans for the merger were being announced. But Hassenfeld wanted the plant to remain open, at least until after the merger, to see if it could be saved.
Hassenfeld acknowledges that this was a source of "some discomfort" between the two men "because it was probably the first time in many, many years that he had really had to ask somebody."
There is an irony in the Playskool episode because, as it turned out, Hassenfeld changed his mind and agreed with Shea. He cites two factors entering into the decision to close the plant; Poor construction of one part of the plant and the plant's location in an area that potential employees were reluctant to enter.
The merger has meant trimming the executive staff from Milton Bradley, but the only other resignation was that of George Volanakis, president of Playskool, Hassenfeld said.
Playskool manufacturing will be shifter in a few months to a plant of Milton Bradley's in East Longmeadow, Mass. Playskool marketing, engineering, research and development will move to Pawtucket.
If the merger has hit a pothole or two, no one on Wall Street seems to be noticing.
"There can be little doubt that the acquisition of Milton Bradley has created the most profitable entrant in the toy industry - one that is running neck and neck for sales leadership," said stock analyst David S. Leibowitz, senior vice president of American Securities Corp. of New York City.
A key to the merger, he believes, is that the two complement each other. Milton Bradley's strength is in puzzles and board games, an area where Hasbro is relatively weak; Milton Bradley is a major player in Europe; foreign sales haven't been a major activity for Hasbro.
This could mean even greater earnings for a company who net income has already soared, in Liebowitz's view.
"Customers have been making commitments for spring, summer and autumn 1985 deliveries since September, and the new line has been very well received," he explained. That means, he said, that "1985 could be another pacesetter."
But Hasbro has strengths in popular basic toys that could fill any toy box; Mr. Potato Head, Lite Brite, Raggedy Ann and Andy, Peanuts and Sesame Street characters are among them.
Found on Top 10 toy characters for 1984 are not only the popular G.I.Joe series but My Little Pony, a miniature pony in pastel colors with long silky mane and tail for combing and braiding, and Glow-Bug, a stuffed bug that lights up.
Casting an unusually cheery glow on Hasbro's receivables are Transformers, a new entry of miniature robots that can be twisted and turned into toy cars, planes - even toy cassette recorders.
Paul Rothman, analyst and vice president of research at the Advest Inc. securities firm in Hartford, sees a possibility for crossbreeding between the strongest lines of the two companies.
"You could take some of the hot things in the Hasbro line and turn them into games and puzzles," for Milton Bradley, Rothman said. "For example, if Mr. Potato Head is so popular, why not a Mr. Potato Head game?"
The acclaim is coming fast these days, but last spring when the proposed merger was announced there was suspicion that Hasbro was paying - at $360 million in cash and stock - too much for Milton Bradley.
Milton Bradley's 1983 sales were off 2.5 percent from the previous year, operating earnings were down 44 percent, and the company had taken a $30 million write off on its consumer electronics subsidiary. The bottom line was a 1983 net loss of $19 million.
The Hasbro offer was "an early Christmas for Milton Bradley shareholders," Leibowitz said at the time.
Harry E. Wells 3rd, research director at the Adams, Harkness & Hill securities firm in Boston, observed that Hasbro's offer of $50 a share was 2.2 times Milton Bradley's book value of $21 - $22 a share.
"A generous evaluation, to say the least," Wells commented then.
Today, Wells is unabashed in his enthusiasm for the merger, crediting Hassenfeld for having the "cash, stock and imagination" to go through with it.
Wells doesn't consider Shea's resignation very interesting. This merger, he said, "has probably gone smoother than anyone would have dreamed."
Other sources agree that the Shea resignation was inevitable. Besides being accustomed to being the top man, he had "a potful of money," as one analyst phrased it, from his sale of Milton Bradley stock to Hasbro.
"In his place, what would you have done? It was preordained that he would quit," commented another observer.
Noted Stephen Smith, the magazine editor, "People who fit in with the new management structure stayed; those who couldn't left. Hasbro definitely calls the tune, and anyone who can't fit in with their management style would decide to leave."
He believes the future of the merged entity can be predicted from the past successes of each. "That means good traditional toys - not electronics. Everything else works off of that; licensing their toys to other toy manufacturers; basing television stories on their toy characters.
"It's like a pitcher with a fast ball," Smith added. "If you have a fast ball, then you can go to a curve, a slider, a change of pace. They have the fast ball and it's the basic toy business."
Editor's Note: This newspaper article was obtained through Linden High School's micro-fiche film library during my senior year in 1995. Linden High School is located in Linden, Mi. See ... it pays to save all that stuff!!!
Date: Sunday, November 25th 1984 12:01am CST
Category: Site Articles
Posted by: Seibertron Permanent Link
Views: 950,282
Written by Judy Hille. Micro-fiche from the Arizona Republic (Phoenix)
Santa. Hey, Santa! Stop swilling eggnog for a minute, and answer this vital question. Those of us who are No. 12,248 or so on the Cabbage Patch doll waiting lists want to know what else is going to be under the tree and underfoot this year.
GoBots? Robotrons? Autobots? What are you mumbling about, old pal? Take your beard out of your mouth and - good grief! What's that thing emerging from the kitchen?
Yes, Virginia, robots are the bottom line this Christmas. And they're doing a lot more than fighting evil and zooming through space in a youngster's imagination. Don't be surprised if the punch and fruitcake come in to the party on little roller feet.
Omnibot, from the California company Tomy, is 2 feet tall, programmable a week in advance and comes with a serving tray for $300. Maxx Steele, a $350 robot from Ideal, does similar tricks, like waking you up in the morning with a built-in alarm clock. They're being promoted for ages 3 to 12.
This information comes from Penny Richman, communications director for the trade association of commercial elves, the Toy Manufacturers of America. She just bought a robot herself. Guess what it did at her latest cocktail gathering?
Robots for most kids, though, will be smaller and will come to the party as cars, trucks, planes, and watches and other innocent guises. The magic happens when the kid gives the Volkswagen a couple of spins and a click. Shazam! It's a robot.
Japanese children have been playing with metal people for about 10 years, but this is the first year they've been exported here. They are sold with legends that give kids a good-vs-evil scenario for play.
GoDaikin Super Robots are the originals, well-designed and fairly expensive ($15 to $85). One of the less costly ones, Dynaman ($18), shoots his fist into space and can turn into a rolling vehicle.
Tonka has GoBots, 4-inch plastic and metal cars and trucks that change into machine people, for about $3.50. Similar are Robotrons, a from Buddy L. Corp., which are a bit cheaper.
"Kids are gravitating to the Transformers," said Mark Osman, assistant manager at Toys By Roy in Fiesta Mall. "Last Saturday, the Matchbox ones, Voltrons - I put out a case and it sold in 15 minutes. I brought out another case, and people were grabbing them out of my arms. It was the same thing Monday."
Transformers, by Hasbro, come in a wide range of prices (about $3 to $25) and varieties of complication. One of the most alluring is the Decepticon Communicator ($20) disguised as a mild-mannered mini-cassette player. Not only does the player turn into an 11-inch robot, the "cassette" also converts into a tiny companion piece.
G.I.Joe and the Star Wars group are the granddaddies of the action figures and still do moderately well. Mattel's Masters of the Universe, which last year sent dozens of parents scurrying after the heroic but scarce He-Man, has introduced Snake Mountain, where the evil Skeletor lives. He-Man's feline war buddy, Battle Cat, is in big demand this year, Osman said.
The outlook in the Cabbage Patch is still bleak, said Osman, who gets at least 25 to 50 calls a day about them. Cabbage Patch clothes, strollers and other accessories are flying off the shelves, however.
"We have numerous amounts of collectible dolls, not Cabbage Patch ones, but others, that are going like crazy," said Donna Scelza, manager of Little House Toys at Metrocenter. According to Richman, doll collecting is now the No. 2 hobby in the United States, after stamp collecting.
Coleco changed this year's Cabbage Patch doll body, Richman said, to cater to just this market. It also has introduced Preemies, which are adopted at an earlier age.
The most popular doll in the world is a jockette this year, Great Shape Barbie. Mattel, maker of the 21-year-old Barbie, also hopes to cash in big with a new line of Rainbow Brite dolls ($10 to $21).
Rainbow Brite has a cast of characters (Red Butler, Patty O'Green, Murky and Lurky Dismal), transportation (STarlite, a flying horse), a little friend (Sprites, tiny dolls that come with each bigger doll) and, of course, a story line about Rainbow Land, where they all live.
"It's really cute stuff," Osman said. "But Rainbow Brite hasn't been on TV yet that much. Once it gets exposure, it's going to sell."
The thing at Little House Toys that attracts the most kids is a Swedish Brio wooden train, Scelza said.
"You start with the starter kit and go on forever, until you have a farm here and a village there," she said. "People just go crazy over it. Kids come in here just to see it and stay forever."
Trivia games, though not as white-hot as they were last spring and summer, have proliferated and are selling briskly. Some sources say there are as many as 50 on the market now, and many of these are for the younger set eager to play the sort of game that's keeping Mom and Dad up past midnight, yelling with their friends.
Selchow & Richter's Trivial Pursuit version for young players won't debut until around February, Richman said.
Editor's Note: This newspaper article was obtained through Linden High School's micro-fiche film library during my senior year in 1995. Linden High School is located in Linden, Mi. See ... it pays to save all that stuff!!!
Date: Sunday, November 18th 1984 4:54pm CST
Category: Site Articles
Posted by: Seibertron Permanent Link
Views: 997,571
Written by Sharon Young
The television ad tells of the continuing battle between the Autobots and the Decepticons, alien machines from the planet Cybertron. As the commercial nears its end, a robot like voice sings, "Transformers: more than meets the eye."
Merchants in South Hampton Roads agree that advertising aimed at children and a TV cartoon show have helped turn Transformers - toys that can be "transformed" from one shape to another - into the gift for Christmas.
Figures from the Toy Manufacturers Association of America, a New York-based trade group, attest to the nationwide popularity of the Transformers. In the six months between June - when Transformers were introduced by Hasbro Industries - and November, sales to retailers totaled $80 million.
By comparison, last year's top-seller, the Cabbage Patch Kids, set a 12-month sales record of $65 million during its first year on the market.
The science-fiction plot of the Saturday-morning TV cartoon apparently fuels the imaginations of young consumers. The honorable Autobots and the evil Decepticons, intelligent robots, become locked in a struggle for power more than 4 million years ago on a planet in a distant galaxy. During an intergalactic chase, groups from both factions crashed on the Earth and were trapped beneath its surface until a volcano erupted, releasing them to continue their conflict.
When the Transformers arrive at the store, there is no hint of this drama. They come in the shape of a tractor-trailer, a jet fighter, a Porsche, a police car, walkie-talkies, and a pistol.
Nothing out of the ordinary.
But with a few tricky flips and folds of metal parts, characters from outer space begin to take shape. The pistol becomes the robot Megatron, the leader of the Decepticons, and the tractor-trailer becomes Optimus Prime, robot leader of the Autobots. There are many supporting characters on both sides.
The toys range in price from $3 to $30 and are aimed at children 3 to 13.
Running second in the area's "transformable" toy market are Tonka's GoBots. They are smaller than the Hasbro products and do not have the advantage of being characters on a weekly TV show.
"Neat," "cool" and "unique," are how children described Transformers.
David Wilson, 12, of Virginia Beach, said he liked the Transformers because the robots can be turned into other toys. "They're neat," he said.
Pre-Christmas supplies have lagged far behind demand in South Hampton Roads, merchants say. However, Teresa Wilson, David's mother, was able to find the Transformers because she began to shop for them in October. "I didn't really have to fight crowds then," she said.
But not everyone shopping for Transformers has had Wilson's foresight or luck. Recently, nearly 200 people showed up an hour before opening time at the Zayre department store on Airline Boulevard in Portsmouth, said an assistant manager who asked not to be identified.
"When we opened, they just came running in," the man said.
Vickie Storm, an assistant manager at K&K toys at Military Circle in Norfolk, said that a number of customers were in check-out lines there when a woman announced that a department store in the mall had just put some Transformers up for sale.
"Everyone dropped what they had and took off ..." Storm said with a laugh.
Alta Subotich, an assistant manager at the Kay-Bee Toy and Hobby Shop in Greenbrier Mall in Chesapeake, said customers have argued in the aisles over Transformers.
And at Tower Mall in Portsmouth, people line up in front of K&K Toys on Tuesdays and Fridays when shipments come in. Valerie Feske, an assistant manager there, said the lines have been so long that they snake around the mall.
"People are desperate for them," added Lorraine Stewart, manager of the K&K store at the Hilltop North Shopping Center in Virginia Beach.
"I've been to three different places ... today," complained Betty Luther of Portsmouth last week. "I can't find them anywhere. It's always the same thing."
Her 11-year-old son asked for Optimus Prime for Christmas after watching the Transformers TV cartoon. "He told me that if he didn't get one for Christmas that he'd die," Luther said.
Likewise, 14-year-old Keith Lieteau of Norfolk said he watches the Transformers cartoon every Saturday. It airs locally on Channel 33 at 7:30 a.m. "I have three Transformers at home already because I couldn't wait until Christmas," Lieteau said.
Alan Wood, regional manager of K&K Toys and Toy Castle stores, said he has tried to analyze the popularity of Transformers. "I think they represent the way the world is being pushed - computers and machines taking on human characteristics," he said.
He said that because of the limited supply, Transformers represent a marginal percentage of K&K's total sales. "But," he said, "if we could get enough ... sales from Transformers could be awesome."
Editor's Note: This newspaper article was obtained through Linden High School's micro-fiche film library during my senior year in 1995. Linden High School is located in Linden, Mi. See ... it pays to save all that stuff!!!
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