HIT Entertainment, a subsidiary of Mattel, Inc. (MAT - Free Report) teamed up with Amazon.com Inc. (AMZN - Free Report) to bring the immensely popular Fireman Sam merchandise and digital content to the U.S.
The Fireman Sam cartoon series is one of the most popular boys’ pre-school cartoons in countries like the U.K., France, Germany, Italy, Benelux, Israel and Poland. In our view, the California-based company is launching this brand in the U.S. in an attempt to boost sales.
Amazon Fireman Sam content hub will begin on Jun 3, and HIT and Amazon will introduce Fireman Sam consumer products in the U.S. later this year.
Amazon will exclusively sell products such as apparel, toys and lunch boxes. Additionally, Fireman Sam TV episodes will be available for streaming and downloading on Amazon Instant Video, Prime Instant Video and FreeTime Unlimited.
With children preferring alternative modes of entertainment such as video games, MP3 players, tablets, smartphones and other electronic devices, the sales of physical toys has been affected. In fact, Mattel had a disastrous holiday season last year, with sales at its core Fisher-Price unit as well as Barbie plunging. We believe Mattel’s deal with Amazon is an attempt to grab a major share of the digital platform.
The Zacks Rank #4 (Sell) company is looking for avenues to turnaround its fortunes. Weak consumer spending due to the sluggishly recovering economy weighed heavily on the company’s top line in the recently concluded quarter. In fact, the company is working extensively on the digital front and plans to bring in enhanced digital capabilities to its American Girl brand to market it across multiple channels by mid-2014.
Better-performing stocks in the same sector include Electronic Arts Inc. (EA - Free Report) and Activision Blizzard, Inc. (ATVI - Free Report) . While Electronic Arts sports a Zacks Rank #1 (Strong Buy), Activision Blizzard has a Zacks Rank #2 (Buy).