Monthly Archives: May 2014

JAKKS Pacific, Skechers Ink Deal – Analyst Blog

In an attempt to revive its business amid shrinking demand for toys in the U.S., JAKKS Pacific, Inc. (JAKK Analyst Report) inked a long-term licensing agreement with California-based leading lifestyle footwear manufacturer, Skechers USA Inc. (SKX Analyst Report). Under the deal, JAKKS Pacific will manufacture a series of toys and products inspired by the Skechers brand, and its children’s footwear brand – Twinkle Toes.

The deal includes the launch of toys under JAKKS’ multiple product groups including collectibles, dress-up and role play, JAKKS’ miWorld line of miniature play environments, and a series of Twinkle Toes-themed Cabbage Patch Kids. These products will be launched next month.

JAKKS will launch a miWorld Skechers playset, compatible with the miWorld Mall DreamPlay app. This feature will enable players to unlock interactive games, content-rich experiences and animation on their smartphones or tablet devices. In our view, the company is seeking to capitalize on the increasing preference for digital games and other electronic learning tools among children.

Apart from this, JAKKS will introduce a series of Cabbage Patch Kids, the popular series of dolls created by Original Appalachian Artworks Inc. The dolls will wear minuscule models of Twinkle Toes footwear, including light-up versions. In addition, some will have Twinkle Toes apparel and backpacks. JAKKS initially acquired the license to manufacture the Cabbage Patch Kids when it bought the Florida-based toy company, Play Along, in 2004.

The deal with Skechers reflects JAKKS’ effort to turn around after product misses, weakening consumer confidence due to a sluggish economy in the U.S. and the loss of a license to sell World Wrestling Entertainment Inc. (WWE Snapshot Report) products. Additionally, the shrinking number of toyshops and toy departments in the U.S. are affecting sales.

However, in our view, JAKKS is trying to mitigate these negatives through prudent deals with kid-focused brands. The company’s license for The Walt Disney Company’s (DIS Analyst Report) animated film Frozen has been the primary sales driver for the last two quarters.

With the changing dynamics of the toy industry, this Zack Rank #3 (Hold) company is also seeking to diversify. JAKKS now has a pets division that manufactures toys for pets. It also has a subsidiary which produces Halloween costumes for kids and adults, and also a unit which sells toys for swimming pools.

Going forward, we believe the company is well positioned with its innovative product launches and organic growth initiatives, such as securing licenses. However, we prefer to remain on the sidelines currently, given the weak consumer spending amid a sluggishly recovering economy and the intense competition in the U.S. toy sector.

Originally posted here –

JAKKS Pacific, Skechers Ink Deal – Analyst Blog

WWE® Chief Strategy & Financial Officer George Barrios to Participate in Cowen Media Conference

World Wrestling Entertainment is principally engaged in the development, production and marketing of television and pay-per-view event programming and live events and the licensing and sale of consumer products under its brands. Co. has four business segments: Live and Televised Entertainment, which sells tickets to live events and merchandise at live events; Consumer Products, which sells home videos products, publishes magazines and includes other products such as video games, toys and books; Digital Media, which includes advertising sales and sales of merchandise and various broadband and mobile content on its websites; and WWE Studios, which distributes filmed entertainment.

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WWE® Chief Strategy & Financial Officer George Barrios to Participate in Cowen Media Conference

Lions Gate and WWE Go Partners for ‘Action Six Pack’ – Analyst Blog

Lions Gate Entertainment Corp. (LGF Analyst Report) and World Wrestling Entertainment Inc. (WWE Snapshot Report) signed a deal to co-produce six new action movies. The series dubbed as ‘Action Six Pack’ will provide a platform to both the superstars and rising stars of World Wrestling Entertainment.

Vendetta will be the first installment of the ‘Action Six Pack’ series and will star Paul Wight A.K.A Big Show. The movie will be directed by the Soska twins (Jen and Sylvia) who had earlier directed See No Evil 2 and American Mary.

Vendetta is scripted by Justin Shady and revolves around the life of a hard-nosed detective who wants revenge from a criminal for his wife’s murder and hence purposely commits a crime which lands him in prison. The filming will begin in the summer of this year.

Meanwhile, work on the second installment has already begun and filming is likely to commence this fall.

Lions Gate and World Wresting Entertainment share a long standing association. The studios have co-produced a number of movies in the past including The Condemned and See No Evil. For 2014, there are two releases lined up namely Leprechaun: Origins and See No Evil 2.

The movies produced by Lions Gate and World Wresting Entertainment are made at a modest budget. As per the studios, these modestly budgeted action movies have a good track record as they do click well with the global audience.

Lions Gate is fast emerging as a leading player in the media industry which boasts of stalwarts like The Walt Disney Co. (DIS Analyst Report) and CBS Corp. (CBS Analyst Report). With franchises like The Hunger Games and the recently released first installment of Divergent, the studio has tasted tremendous success.

Yesterday, the company announced to release Divergent’s first installment on DVD (plus digital), Blu-ray Combo Pack (Digital HD and plus DVD), Pay-Per-View and Video on Demand on Aug 5, 2014. However, on Digital HD, this blockbuster flick will be available from Jul 22.

Lions Gate and World Wrestling Entertainment both carry a Zacks Rank #3 (Hold).

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Lions Gate and WWE Go Partners for ‘Action Six Pack’ – Analyst Blog