Hasbro, Inc. (HAS - Free Report) , like most other traditional toymakers, is plagued by lower consumer demand and sales crunch. The company is relying on strategic partnerships to revive its sales.
To this end, the company announced its partnership with Quidd, Inc., one of the foremost platforms for buying, trading and using finest digital goods. Teaming up with Quidd, Hasbro plans to sell its limited-edition digital stickers, trading cards and toys from 40 of its brands. Displayed and traded through Quidd’s free mobile app, this will be a chance for Hasbro to expand its product portfolio to a larger number of customers.
Why Partnerships are the Need of the Hour?
The U.S. toy industry was dealt a death blow when the country’s largest independent toy seller, Toys "R" Us filed for bankruptcy last September. To add a nail in the coffin, Toys “R” US also confirmed that it is liquidating its entire U.S. operation, leaving toymakers like Hasbro, Mattel (MAT - Free Report) and JAKK Pacific (JAKK - Free Report) in a soup, as these used to derive a considerable portion of revenues from sales to Toys "R" Us. Although retailers like Amazon (AMZN - Free Report) came to the rescue of these toymakers, the companies currently don’t have shelf spaces as big as Toys “R” Us, which remains a concern.
Meanwhile, Hasbro has been trying to curb its dependence on Toys “R” Us since the latter’s Chapter 11 filing. It has been testing waters with new distribution methods, the development of digital play components and exploration of ventures with other industries. The company has diverse retail channels such as drugstores and dollar chains, and big mass market retail. It also has a robust online strategy in place that includes interactive content and virtual immersive experiences. It has a five-year agreement with Paramount to enhance storytelling and content capabilities. The company also invested in Boulder Media, its animation studio, and cultivated its digital capacities to drive sales.
The recent partnership with Quidd further underscores Hasbro’s strategy of extending its partnerships and focusing on greater distribution of its iconic products to drive incremental sales. As it is, Quidd’s digital goods ledger and catalog is the largest in the world, which sold 1.75 billion serialized items since its launch in 2015.
Notably, Hasbro has been one of the early movers to gauge the impact of Toys “R” Us bankruptcy amid its peers. Hasbro has been adapting rapidly to the changing market conditions and planning counter strategies. However, it is yet to be seen if the company’s efforts to turnaround through collaborations and product innovation could shore up its flagging fortunes.
Meanwhile, shares of the Zacks Rank #5 (Strong Sell) company have underperformed the broader industry in a year’s time. While the industry rallied 10.9%, Hasbro’s shares have lost 6.7%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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