Brian Goldner, recently tapped to be president of the company's U.S. toy group, has met with roster shops as he seeks to increase efficiency and bolster Hasbro`s marketing efforts, according to executives close to the toy behemoth. A Hasbro spokesman said only that, "Brian Goldner is looking at the agency situation right now."
One agency executive described the scenario as complex and without any clear resolution. However, one thing appears certain: Hasbro has placed its crown jewel, the Boys Toys division, into review, with an eye toward an agency consolidation.
An annualized billings number on the Boys Toys account is difficult to nail down since spending shifts year to year depending on which brands get ad support. Spending for many of Hasbro`s licensed products, such as Star Wars or Batman, is also dependent on the release dates and success of related films and TV shows. For the most part, spending on the boys' products usually is in the $50 million to $100 million range, according to industry estimates. Hasbro spent $194 million on its total advertising efforts last year, according to Competitive Media Reporting.
Grey Worldwide and Griffin Bacal, both New York, handle creative on the Boys Toys business, which consists of about a dozen "core" brands and a handful of "non-core" products. Grey oversees products such as Batman, Star Wars, Micro Machines, Starting Lineup and Nascar racers. Griffin Bacal`s accounts include Tonka, GI Joe and Beast Wars.
A spokeswoman for Jordan McGrath Case & Partners/Euro RSCG, New York, another of Hasbro`s main roster shops, said that agency won`t be affected by any shifts in the toy group since it only handles board games. Both Grey and Griffin Bacal declined to comment. Each agency handles media planning for its specific brands, while media buying is divided between Grey`s MediaCom, and Omnicom Group's OMD, New York.
The Boys Toys division is "one of the cornerstones of Hasbro" said David Leibowitz, a managing director at Burnham Securities, New York. He said the toy company is most likely working to "have all [its] ducks in a row" before February's American International Toy Fair in New York, and other 2001 toy shows around the world.
Last month, Hasbro, the No. 2 toy company behind Mattel, warned it would have lower-than-expected earnings for the third and fourth quarters. In the third quarter ended Oct. 1, net earnings were $13.8 million, compared with $85 million in 1999. Net revenue decreased 2% to $1.07 billion. Hasbro stock closed Nov. 17 at $11.88, 51% off its 52-week high of $24.25.
The company blamed the results on soft U.S. demand for Pokemon toys, as well as weak global sales for Star Wars action figures. The toy company said it will reevaluate its 2001 product line and keep its focus on core brands. Chairman-CEO Alan Hassenfeld said in a statement that, "Improving Hasbro`s profitability is our highest priority."