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Walmart Stores, Inc., recently announced a new global sourcing strategy that involves the creation of Global Merchandising Centers, a change in leadership and structure, and a strategic alliance with Li & Fung, the global sourcing organization.
Walmart first announced a consolidated global sourcing structure centered around new Global Merchandising Centers (GMCs) at its annual meeting for the investment community in October, according to the announcement on Walmart's website. This new structure is expected to leverage the company's global scale in both general merchandise categories (although specific product categories weren't listed) and global food sourcing.
The core of the company's overall global sourcing strategy will be to continue increasing direct sourcing for the company's private brands. Today, private brand merchandise represents more than $100 billion in purchasing annually, according to Walmart.
Ed Kolodzieski, currently president and CEO of Walmart Japan Holdings G.K. and Seiyu, has been promoted to executive vice president and will lead Walmart's Global Sourcing. Kolodzieski will report to Walmart vice chairman Eduardo Castro-Wright.
As part of this new strategy, Walmart also finalized a series of agreements with Li & Fung. The agreements are non-exclusive and do not include volume or shipment commitments, according to a statement from Walmart. The strategic alliance between the two companies will allow Walmart to realize the benefits of consolidating a portion of its sourcing portfolio. Li & Fung, which is forming a new company to manage the Walmart account, is expected to build capacity that would enable it to act as a buying agent for goods valued at approximately $2 billion within the first year.
"In sum, we are redefining how we source products that are imported into Walmart retail markets around the globe," Castro-Wright said in a recent statement. "By realigning our resources, leveraging our scale, and restructuring our relationship with suppliers, we will enable our businesses around the world to offer even more competitive pricing on merchandise and to provide our customers a clear and compelling assortment of better quality products at lower prices."
The NPD Group announced that U.S. retail sales of toys generated $21.47 billion in 2009 compared to $21.65 billion in 2008, a decline of under 1 percent. In contrast to fourth quarter (October-December) 2008, Q4 2009 sales show that, while revenues were flat due to heavy promotional activity at retail, unit sales were up four percent vs. Q4 '08.
Looking at revenue sales performance across super-categories, building sets and arts and crafts experienced the most significant increases, at 23 percent and 7 percent, respectively. Action figures and games/puzzles saw respective revenue increases of 4 percent and 1 percent. Looking at the opposite side of the revenue sales spectrum, youth electronics and plush experienced the largest declines when compared to 2008, at 17 percent and 13 percent, respectively.
Counter to what many would expect due to the economy, unit share for toys priced under $5 decreased in 2009, both for the full year and in the fourth quarter. In 2009, while overall unit sales were down less than 1 percent (0.5 percent), the only price range that lost share were toys under $5. In other words, people were buying more toys priced in the mid-range (between $5 and $10).
All channels experienced flat to minimal gains in share of dollar sales, with the most significant changes being experienced by toy stores, which saw a decline of 1 percent mostly due to KB Toy stores closing, and mass merchant/discount experiencing an increase of 1 percent.
Top properties for the year based on total dollar sales (listed here in alphabetical order) included Bakugan, Barbie, Crayola, Star Wars, and Transformers. Licensed toys represented 25 percent of total industry sales in 2009, compared to 2008's 27 percent. Based on dollar sales, Cars: The Movie, Disney Princess, Dora the Explorer, Star Wars, and Thomas and Friends topped the list of 2009's best-selling licensed properties (listed here in alphabetical order).
Horizon, a brand of certified organic dairy, and Global Icons, the licensing and brand merchandising agency, announced an exclusive licensing partnership.
Global Icons will build upon Horizon's leadership in developing healthy, nutritious products in the organic food space, by creating new strategic licensing partnerships that align with the brand's positioning and reinforce its consumer promise. The
program will further diversify the brand portfolio in the frozen, refrigerated, snack, and supplement aisles.
Horizon says it works with nearly 500 organic family farms across the United States and continues to help additional farms transition to organic practices. Its accomplishments in new dietary improvements, including the addition of DHA Omega-3 fatty acid in its products, endorse a healthy and balanced lifestyle. Horizon's existing proprietary line includes a variety of milk, cream, cheese, cottage cheese, cream cheese, butter, and yogurt products.
Nickelodeon in the UK has secured the TV broadcast rights from Corus Entertainment's Nelvana Enterprises for 51 episodes of the new series Beyblade: Metal Fusion.
Set to launch on NickToons in the UK in September 2010, the show will join other titles in its boys' action block. Co-produced by Nelvana and d-rights, the series offers a fresh take on the original Beyblade, with new characters competing for dominance with their spinning Beyblade tops, battling against an evil organization, Dark Nebula.
Hasbro Studios has named animation industry veteran Kathy Page to serve as vice-president of production. She will oversee physical production of programming produced by Hasbro Studios. Much of the content produced by the studio will be seen on The Hub, the new television network launching this fall created by the joint venture between Hasbro and Discovery Communications as well as in international markets.
Page joins Hasbro from Sony Pictures Television where, as vice-president of animation since 2007, she led the television animation production division, overseeing production on such series as The Spectacular Spiderman, and Sit Down, Shut Up.
Jones Apparel Group, Inc., announced the appointment of Richard Dickson to the position of president and CEO of the branded businesses of Jones Apparel Group, Inc., effective February 8, 2010. Concurrent with this appointment,
Wesley Card's title will change from president and CEO to CEO. Dickson will report directly to Wesley Card and will be responsible for management of the company's wholesale and retail businesses worldwide.
Dickson has significant leadership, general management, and merchandising experience working for major brands with global recognition, including Mattel, Inc., Bloomingdale's, and Estee Lauder Companies. Most recently, Dickson was at the helm of the Barbie brand globally, as general manager and senior vice-president, Barbie, Mattel, Inc., where he revitalized the 50-year-old, iconic brand and drove a turnaround for its business, which spans toys, entertainment, digital/online, retail, and more than 45 different consumer products categories worldwide.
Prior to joining Mattel in 2000, Dickson had spent more than 10 years at Bloomingdale's in a variety of positions before launching Gloss.com, an e-commerce beauty website he helped build. Gloss.com was acquired by Estee Lauder Companies in 2000 and Dickson was appointed vice-president of brand management and merchandising for Estee Lauder Companies new online business.
In light of this change, Mattel announced that the current Barbie leadership team will continue the Barbie brand's current momentum under the direction of Tim Kilpin, who has been named GM and senior vice-president of Mattel Brands. As part of his new responsibility, Kilpin will add the Barbie business to his current portfolio, which includes such brands as Hot Wheels, Matchbox, and Tyco R/C, as well as Mattel's other girls, entertainment, and games businesses.
"Richard Dickson has made many important contributions to Mattel over the past 10 years most recently leading the team that revitalized the Barbie brand," says Kilpin. "Richard leaves behind a strong brand vision, identity, and strategy, as well as a talented leadership team to carry on the Barbie momentum."
Mattel announced last week its fourth quarter and full-year financial results. For the quarter, the company reported net income of $328.4 million or 89 cents per share, compared to last year's fourth quarter net income of $176.4 million, or 49 cents per share. For the year, the company reported net income of $528.7 million of $1.45 per share, compared to last year's net income of $379.6 million or $1.04 per share.
For the quarter, net sales were $1.96 billion, a one percent increase from last year, and included a favorable impact from changes in currency exchange rates of four percentage points. On a regional basis, fourth quarter gross sales were down two percent in the U.S. and were up three percent in international markets, which included a positive impact from changes in currency exchange rates of eight percentage points. Operating income for the quarter was up 80 percent to $417.4 million.
For the year, net sales were $5.43 billion, an 8 percent decline from $5.92 billion last year, and included an unfavorable impact from changes in currency exchange rates of two percentage points. On a regional basis, full-year gross sales were down four percent in the U.S. and were down 13 percent in international markets, which included an unfavorable impact from changes in currency exchange rates of four percentage points. Operating income for the year was $731.2 million, up 35 percent compared to the prior year.
Taking a look at some highlights, worldwide gross sales for Barbie were up 12 percent; Hot Wheels was up 16 percent; Core Fisher-Price was up one percent; and American Girl was flat.
According to the National Retail Federation (NRF), retail industry sales (which exclude automobiles, gas stations, and restaurants) for December 2009 rose 2.3 percent unadjusted year-over-year and fell 0.5 percent seasonally adjusted from November. As a result, preliminary 2009 holiday sales, which combine the full months of November and December, rose 1.1 percent to $446.8 billion, surpassing NRF's projected decline of 1.0 percent.
"With an eye on managing inventory and maintaining lower price points, retailers did a tremendous job of planning for the holiday season," said NRF chief economist Rosalind Wells. "While the consumer appears to be spending again, double digit unemployment numbers will remain an impediment to maintaining this momentum."
Apparel was a big driver for retailers as clothing and clothing accessories stores for December increased 7 percent year-over-year and dipped 0.6 percent from November. Sporting goods, hobby, book and music stores also performed well with December sales increasing 3.9 percent from last year and up 1.6 percent month to month. Health and personal care stores continue to be a bright spot in retail with year-over-year December sales increasing 4.8 percent and monthly gains of 0.8 percent.
The weak housing market continues to impact the sale of home furnishings with December sales of furniture and home furnishing stores decreasing 3.5 percent from December 2008 though increasing a slight 0.3 percent from the previous month.
Couples plan to spend less on each other but more on their family, friends, and co-workers and even more on their pets. According to the National Retail Federation's (NRF) 2010 Valentine's Day Consumer Intentions and Actions Survey, conducted by BIGresearch, couples will spend an average of $63.34 on gifts for their significant other or spouse, compared to $67.22 last year. The average person will shell out $103 on traditional Valentine's Day merchandise this year, similar to last year's $102.50. Total holiday spending is expected to reach $14.1 billion.
With Americans cutting back on the amount they spend on their significant other, friends and co-workers can expect a little bit more this year. The average person will spend $5.37 on friends, up from $4.74 last year; $4.29 on classmates and teachers, compared to $3.59 last year; and $2.84 on co-workers, slightly up from the $1.94 they spent in 2009. Consumers will spend $3.27 on their furry friends, up from $2.17 last year. Spending on family members will remain the same ($20.94 vs. $20.95 last year).
As in previous years, men will spend nearly twice the amount women spend on the holiday. The average man plans to spend $135.35 while women only expect to spend $72.28. Personal and practical gifts will resonate with celebrants again this year as more people will look to sweaters, winter accessories, and other clothing options in place of jewelry or an evening out. Traditional gifts such as greeting cards, candy, and flowers remain popular choices.
A Jeep lifestyle store recently opened in the Cape Town International Airport in South Africa, says The Joester Loria Group, which represents the Jeep brand. This is the first airport retail location in South Africa for Jeep. However it joins 36 freestanding Jeep stores throughout major cities in South Africa. In addition to freestanding stores there are more than 20 Jeep shop in shops in the leading department store chain Edgars. Musgrave Agencies, the local licensee was eager to open the store in time for this summer's 2010 World Cup hosted by South Africa.
Warner Bros. Consumer Products announced that Bugs Bunny on Broadway will celebrate its 20th anniversary in 2010 with a newly-created concert sequel, Bugs Bunny at the Symphony. The new concert, as well as the original Bugs Bunny on Broadway, is created and conducted by Emmy Award winner George Daugherty, and produced by Daugherty, Emmy Award winning David Ka Lik Wong, and their award-winning IFX Productions.
Bugs Bunny at the Symphony, featuring a new fusion of on-screen Looney Tunes and live symphony orchestra accompaniment, will spotlight some of the original cartoons of Bugs Bunny on Broadway while adding an enlarged "cast" of Warner Bros.' animated characters and cartoons to this celebrated melding of classical music and classic animation.
In keeping with the project's 20-year history of traversing the globe, Bugs Bunny at the Symphony will be unveiled in mid-2010 in a series of performances around the globe, including a high-profile, two-tiered world premiere at Australia's Sydney Opera House with the Sydney Symphony Orchestra on Friday and Saturday, May 7-8, and at the Hollywood Bowl with the Los Angeles Philharmonic on Friday and Saturday, July 16-17.
In addition to these engagements, Bugs Bunny at the Symphony will make an Australian national tour in May 2010, including appearances with the West Australian Symphony Orchestra in Perth and The Adelaide Symphony Orchestra. The U.S. East Coast premiere will take place in Washington D.C. with The National Symphony Orchestra at Wolf Trap Filene Center on Friday and Saturday, August 6-7. More cities and venues worldwide are expected to be announced soon.
Disney announced a collection of apparel and accessories inspired by its
upcoming feature Alice in Wonderland, which is scheduled for a U.S. release on March 5, 2010. Disney Consumer Products (DCP) collaborated with jewelry designer, Tom Binns, fashion designer Sue Wong and Swarovski, the world's largest producer of cut crystals, to create an interpretive line that brings the allure and mystery of the film and characters to life.
As part of the Alice fashion experience, DCP and Bloomingdale's have joined forces to create one-of-a-kind window displays at Bloomingdale's flagship 59th street store in New York City, which will be unveiled in March. The windows will feature props from the film and highlight a selection of items from the designer line including Sue Wong for Walt Disney Signature dresses and Tom Binns for Walt Disney Signature jewelry. The windows at 59th street will be complemented by a special exhibit in the contemporary sportswear department on the second floor, which will feature select costumes and props detailed with information from the film.
In addition, seven Bloomingdale's stores across the U.S. including the New York City flagship store will enhance their Alice in Wonderland merchandise displays with special signage and video screens that will play behind-the-scenes footage and select bonus material. The stores include Beverly Center, CA; Century City, CA; San Francisco; South Coast Plaza, CA; Aventura, FL; and Short Hills, NJ.
To help explain the updated requirements for the Consumer Product Safety Improvement Act (CPSIA) and what they mean for the licensing community, Susan DeRagon, associate director of the toy and premium division at Specialized Technology Resources (STR), will host a webinar for the International Licensing Industry Merchandisers' Association (LIMA) on Wednesday, February 3, from 12-2 p.m. EST. The webinar will cover material of interest to those in both the hardlines and softlines sides of the licensing business.
Specialized Technology Resources (STR) provides testing, audit, and responsible sourcing services to ensure that clients' products and systems meet quality, safety, and social standards. STR has labs and offices in more than 30 countries across five continents.
Those who sign up for the CPSIA Update webinar are invited to submit questions and specific areas of interest in advance of the seminar so that DeRagon may incorporate them into her presentation. Please email questions to Marty Brochstein of LIMA at mbrochstein@licensing.org by noon EST on Monday, February 1.
Webinars are free to LIMA members and $99 for non-members. Visit the LIMA website (www.licensing.org) to sign up for webinars. For more information on the webinar program, contact Christina Attardo at cattardo@licensing.org or call (646) 744-3741.
Hasbro, Inc., announced that Jerry Perez is joining the company as senior vice-president and global brand leader
for the Hasbro's worldwide preschool business. In this role, he will lead global strategy, marketing, and merchandising for Hasbro's preschool brand portfolio including Playskool, Mr.
Potato Head and Play-Doh, among others. He will also lead global efforts around the recently announced Sesame Street toy and co-branded games license, with the first product becoming available in 2011.
Perez comes to Hasbro with nearly 25 years of global and domestic toy industry experience. Prior to his association with Learning Curve in 2007, Jerry was president of LeapFrog Enterprises since 2004. He also held a series of progressively more responsible positions at Fisher-Price, a division of Mattel, over a 12-year period where he eventually managed the worldwide Fisher-Price business, including toys, juvenile products, battery-powered ride-ons, and licensing. After beginning his career in marketing at Quaker Oats, Perez held several marketing positions at Kenner, which was acquired by Hasbro in 1991.
MODA International Marketing has signed an agreement to represent UNICEF for an international licensing program. This agreement will cover a range of categories such as toys, apparel, educational products, optical, first aid, safety products, strollers and car seats.
Hasbro, Inc., announced that it's introducing its Beyblade: Metal Fusion line in Canada this spring and is expected to launch in the U.S. this fall. Hasbro's Beyblade: Metal Fusion battling-top toy line allows kids to collect, customize, and compete like never before with a new, metal gear system and the introduction of an online virtual battle component.
In 2002, Hasbro introduced Beyblade around the world by teaming up with Tomy Company, Ltd. who distributed Beyblade toys in the Middle East and Asia. The brand was relaunched in Japan in 2008 via Tomy and has since sold almost 10 million tops and accessories with thousands of kids competing in Beyblade tournaments across the country. In 2010, through d-rights, Inc., and Nelvana Enterprises, Hasbro has been selected as the master toy licensee outside of the Middle East and Asia. Set to launch this fall the Beyblade: Metal Fusion animated series will feature 51 new episodes starring a fresh cast of characters.
Chorion is partnering with ScrollMotion, creators of the Iceberg Reader and a leading developer of original iPhone applications, to bring its Mr. Men and Little Miss classic books to the iPhone and iPod Touch. Available now in iTunes, the digital books expand upon the traditional children's book reading experience by incorporating scrolling
image exploration, interactive controls, and a voice recorder.
The titles currently on offer are: Mr. Happy, Mr. Tickle, Mr. Bump, Mr. Messy, Mr. Mischief, Mr. Perfect, Mr. Funny, Mr. Grumpy, Little Miss Sunshine, Little Miss Chatterbox, Little Miss Giggles, Little Miss Stubborn, Little Miss Fun, Little Miss Naughty, Little Miss Bossy, and Little Miss Trouble. The book apps are available for $3.99 each, with an introductory price of $1.99 each for Mr. Tickle and Little Miss Chatterbox.
Mattel is celebrating Barbie's 125th career this year by kicking off a global campaign to further inspire girls by partnering with The White House Project and Take Our Daughters and Sons to Work Foundation, as well as announcing Barbie's "10 Women to Watch in 2010" list. Additionally, for the first time, consumers can help select Barbie's 125th career by voting at www.Barbie.com/Vote and choosing from among architect, computer engineer, environmentalist, news anchor, or surgeon. The winning 125th career will be unveiled on February 12 at New York Toy Fair.
With more than 120 careers on her resume-spanning from registered nurse to rock star, veterinarian to aerobics instructor, pilot to police officer-Barbie continues to take on aspirational and culturally relevant roles. In 2010, Barbie takes on several new careers, including snowboarder,
ballroom dancer, pizza chef, and race car driver.
Throughout the year, Barbie will inspire girls by closely working with signature partners, including The White House Project, Take Our Daughters and Sons to Work Foundation, and a group of 10 highly accomplished, noteworthy women Barbie has named "The 10 Women to Watch in 2010."
The White House Project: Working to advance women in leadership with the project mission "add women, change everything," The White House Project and Barbie have partnered since Barbie first ran for Oval Office in 1992. This year, The White House Project, a non-profit/nonpartisan organization, and Barbie are partnering to ignite a national movement to encourage girls to dream and achieve through mentoring programs.
Take Our Daughters and Sons to Work Foundation: As the lead sponsor of Take Our Daughters and Sons to Work Day, a global event which activates millions of kids to visit workplaces on April 22, Barbie and the Foundation are engaging girls through mentoring, experiential content, and workplace events. By helping bring millions of girls to the workplace, Barbie and the Foundation are allowing girls to envision the future and encouraging them to share their dreams with other girls.
10 Women to Watch in 2010: In 2010, Barbie honors 10 women who serve as role models for women's leadership. Barbie's 10 Women to Watch in 2010 salutes women who continue to innovate and forge paths to be followed by others. The following nine women have been named as Women to Watch: Gretchen Bleiler, Olympic snowboarder; Tavi Gevinson, fashion blogger; Cindi Lieve, editor-in-chief, Glamour magazine; Brittany Lincicome, LPGA golfer; Danica Patrick, professional race car driver; J.K. Rowling, author and businesswoman; Rachel Roy, fashion designer; Susan L. Taylor, editor-in-chief emeritus of Essence magazine, and founder, National CARES Mentoring Movement; and Marie C. Wilson, founder and president, The White House Project.
The 10th woman will be announced in February timed to the unveiling of Barbie's 125th career to spotlight a woman in that industry.
RJM Licensing, Inc., announced that it has just signed a deal to represent Caroline Manzo, star of the hit TV show The Real Housewives of New Jersey and her children's line called 4MyMom. RJM Licensing will be looking for licensees to fill such categories as infant/toddler apparel and accessories, bedding, home décor, toys and games, stationery, and gifts and collectibles for the 4MyMom program.
For the Caroline Manzo brand, RJM Licensing will be looking for licensees to fill categories such as kitchen textiles and cooking products, cookbooks and mom gift books, greeting cards (with Caroline's signature phrases), and novelty gifts.
TV personality Caroline Manzo is currently on The Real Housewives of New Jersey on the Bravo network. Caroline lives in Franklin Lakes, New Jersey, with her husband Albert, who owns a successful catering company and their three children. In addition to starring on Real Housewives, Caroline owns the real estate firm Opus Properties.
The Craft & Hobby Association (CHA) and the Toy Industry Association (TIA) announced 
that the TIA will host a pavilion for toys and youth products during CHA's Summer Convention and Trade Show held at the Donald E. Stephens Convention and Conference Center in Rosemont, Illinois from July 27-29, 2010. This collaborative effort provides increased opportunity for both organizations to better serve their buyer and seller communities and offers CHA Summer Show attendees a broader array of products.
The pavilion will feature manufacturers and distributors from TIA's premiere trade events American International Toy Fair and Fall Toy Preview. The CHA/TIA collaboration also signifies the launch of a new cross-industry promotional program, which could expand to include enhanced retailer education and legislative outreach. Both industries already share a united voice on several important issues, including consumer product safety legislation. For more information on either organization visit www.craftandhobby.org or www.toyassociation.org.
The Discovery Communications-Hasbro joint venture now has a name: The Hub. The children's network, set to launch in fall 2010 now known as The Hub, will reach approximately 60 million homes on what is currently known as the Discovery Kids network.
"A hub is a place where great things come together-and that is precisely what The Hub network will be when it launches," said Margaret Loesch, president and CEO of the venture in a statement. "The Hub will be a fun and transformative destination that brings kids and their families together by presenting clever stories and engaging characters."
Content on The Hub will feature rich storytelling with active, multi-dimensional characters and unexpected heroes. The Hub will incorporate Hasbro properties, including Transformers and My Little Pony, along with Discovery Kids franchises such as Adventure Camp and Flight 29 Down as a part of a diverse and robust lineup of original and acquired programming. The Hub's online home, www.hubworld.com, will become an entertainment destination offering kids access to video clips, interactive games, and community features that extend the experience of the network's content.
Popular Mechanics will now be accessible to kids. The magazine has partnered with Old Navy to develop a line of limited-edition T-shirts for infants, toddlers, and kids. Featuring four designs inspired by vintage, transportation-themed Popular Mechanics cover art, the collection will be available in Old Navy stores nationwide and at oldnavy.com in mid-January. T-shirts will be priced between $10.50-$12.50 each.
Popular Mechanics and Old Navy are also inviting kids up to the age of 12 to share their own vision of the future of transportation with the Kids Can Do Great Things Design Contest. Throughout its 100-plus year history, Popular Mechanics has captured the excitement and promise of new transportation technology in its cover images. The Kids Can Do Great Things Design Contest invites kids to create an original design for a Popular Mechanics cover with this same theme. Entry forms will be available in stores nationwide starting February 5. The winner will receive a $500 shopping spree at Old Navy and have his or her design featured in an upcoming issue of Popular Mechanics. The magazine will also donate $500 on the winner's behalf towards First Robotics, a non-profit organization that furthers science education.
Toei Animation signed a deal with Uniqlo, the Japanese casual wear designer, manufacturer, and specialty store retailer, to create a line of T-shirts featuring the Toei brands.
The brands expected to be featured include Dragon Ball, One Piece, Galaxy Express 999, Dr. Slump, and Saint Seiya. The line will be developed by Uniqlo to be featured in France, Russia, the United Kingdom, the U.S., China, Singapore, and Korea. The launch is planned for this spring.
Hilco Consumer Capital (HCC), the private equity firm with an exclusive focus on investing globally in consumer product brands and related assets, announced that Jamie Salter, CEO, will be resigning from the company to pursue other interests and that Eric Kaup, currently its general counsel, has been named as the interim CEO. Kaup will also continue to serve as general counsel and executive vice-president of Hilco Trading, LLC, HCC's parent company.
Salter, who is returning to the entrepreneurial and private equity world, helped co-found HCC with Hilco Trading in December 2006. The company invests in consumer products brands and builds additional incremental value through innovative brand licensing, product development, marketing, and merchandising strategies. Investments include Polaroid, Sharper Image, Bombay Co., Ellen Tracy, Linens 'N' Things, Tommy Armour Golf, and Halston. HCC also is the exclusive licensing advisor to The House of Marley.
Hidden City Games, Inc., publisher and worldwide licensor of Bella Sara, announced the appointment of licensing veteran Sharon M. Bennett as licensing consultant for North America. Specializing in global licensing, brand extensions, and business development,
Bennett will be responsible for Bella Sara's primary retail development, licensee relations, and sales.
Previously serving as senior vice-president of global licensing and strategic partnerships at Discovery Communications, Bennett was responsible for worldwide licensing operations for Discovery's cable networks and signature brands, including Discovery Channel, Animal Planet, TLC, Discovery Kids, and more.
Bennett also served at Saban Consumer Products, Disney Consumer Products, and most recently, she launched a boutique brand licensing consultancy, Bennett Branding.
MEGA Brands, Inc., announced this morning a recapitalization transaction where it noted the following key points:
The new capital structure resulting from the recapitalization transaction creates financial stability for MEGA Brands and its stakeholders. It also provides a stronger financial base for the execution of the company's operating strategy going forward with improved cash flow and liquidity from reduced interest expenses to fund operations and investment in innovation. Closing is expected to occur by the end of March.
The corporation's suppliers, as well as its obligations to employees, are unaffected by the recapitalization transaction and will continue to be paid or satisfied in the ordinary course.
"This transaction is a significant positive development for MEGA Brands. Once implemented, MEGA Brands will be repositioned for the future with a solid balance sheet and the financial flexibility to focus on profitable growth globally," said Marc Bertrand, president and CEO, in a statement. "After a thorough review of numerous alternatives, we are convinced this is the best option for all stakeholders. This transaction demonstrates the commitment of our current major shareholders and investors through the injection of over $121 million in new capital. Further, it is business as usual for our customers, suppliers, and employees who will remain unaffected by this transaction."
Under the recapitalization transaction, the corporation will repay in cash and with an equity component all of its outstanding senior secured indebtedness, which as of December 31, 2009, was approximately $357.2 million, at a recovery of approximately 70 percent to holders of such secured debt (based on the amount of secured debt outstanding as at December 31, 2009). In addition, holders of the corporation's senior unsecured convertible debentures totaling approximately $71.7 million as of December 31, 2009, have agreed to cancel their debentures for secured debentures, common shares, and warrants in the amount of $15 million for a recovery of approximately 21 percent (based on convertible debentures outstanding as at December 31, 2009).
The corporation will issue approximately 284.7 million new common shares at a price of CDN$0.50 per share and 234.6 million warrants exercisable into common shares at a price of CDN$0.50 per warrant. After giving effect to the recapitalization transaction, approximately 321 million common shares will be issued and outstanding and approximately 556 million common shares will be outstanding on a fully diluted basis. This compares to the current 36.6 million common shares issued and outstanding, and 60.1 million common shares outstanding on a fully diluted basis assuming the conversion of the convertible debentures. As a result, current shareholders will own approximately 11.4 percent of the common shares issued and outstanding at the closing of the recapitalization transaction, and approximately 6.6 percent on a fully diluted basis.
Royalties
Adult Industry Faces Triple Threat
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