Providence Equity Partners approached Hasbro and analysts were quick to point out that such a deal would provide meagre returns if it meant keeping the company as it is - but what if the company were to join forces with a publicly traded media or entertainment company? Vertical integration that way lies.
Hasbro has already spread its wings into entertainment with the launch of The Hub and its movie exploits have hit pay dirt, so it’s not such a big hop, skip and a jump to morph into a major entertainment player, is it?
For too long, toy companies have followed a pretty linear path, seemingly quite content to board the heart-thumping roller coaster of success and failure that every year brings. If you are proud of the core brands that underpin your portfolio, why not use everything in our power to bring them to the biggest audience you can?
Toys R Us was one firm that found thinking outside the box profitable last Christmas. Toys R Us Holiday Express was to be a short-term seasonal foray into shopping malls but has now turned into a longer term strategy. They had planned to close the stores in mid January but have been kept open well past their planned closure dates, dropping the word “Holiday” from their name. There is no suggestion that this idea will be coming to the UK any time soon but, with out of town retail space at a premium, who knows?
While TRU is reporting strong sales from the very modern on-line route, the company is also reviving an age old idea with a holiday savings program that allows shoppers to put money away with the company for gifts.
It is another example of how the recession has forced retailers to come up with creative sales promotions, according to Gerrick Johnson, an analyst at BMO Capital Markets. “It says the economy’s still operating at a sub-par level,” he said.
Good point. Things might be getting better a little all the time but you’d be brave (or foolish) to rest on your laurels.