Did Brave’s Princess Merida Save Jakks Pacific’s Independence?

Jun 29, 2012
J. Webster
Comments Off on Did Brave’s Princess Merida Save Jakks Pacific’s Independence?

Jakks Pacific (JAKK) is now predicting it will sell triple the amount of toys associated with the movie Brave. The prediction is based on strong demand for the products over the last two weeks. Several items have sold out completely in toy stores. Jakks is working on doubling the number of toys that will be available in stores around the time of the DVD launch.

Brave, the latest movie from Pixar, is the first in its lineup to have a heroine as its focal point. Pixar has been making hit animated movies for years and the latest continues the streak of number one openings. The movie made $66 million its opening weekend and has now made $91 million in its first six days. The movie has solid reviews and is well received with many audiences, which should

Last year, Jakks Pacific turned down a $20 per share buyout offer from Oaktree Capital. Jakks said at the time that the deal undervalued its toy company. Last month, Oaktree ended talks with the toy maker saying it could not reach a deal. Was a princess in a Pixar movie the reason the toymaker turned down the deal? Did management know how well the movie would do and that the toys would be selling out of stores? It seems unlikely, but could be a good step in a year of toy sales growth to warrant a higher price.

The company has a great line up of brands across several platforms. The company’s website lists products by target audience.

  • Boys: Black & Decker, Club Penguin, Creepy Crawlers, Disney Role Play, Marvel Role Play, Max Force, Men in Black 3, Monsuno, MXS, Pokemon, Real Contruction, S.L.U.G. Zombies, Spy Net, TNA, The Smurfs, UFC.
  • Girls: Cabbage Patch Kids, Disney Fairies, Disney Fairies Dress Up, Disney Princess Dress Up, Disney Princess & Me, Disney Role Play, Hello Kitty, Winx.
  • Preschool: Activity Tables, Black & Decker, Cabbage Patch Kids, Disney Fairies Dress Up, Disney Princess Dress Up, Disney Princes & Me, Disney Role Play, Fisher Price, Graco, My First Disney Princess, Play Tents, Ride Ons, Sports Arcade, The Smurfs.
  • Interactive: Spy Net, TV Games
  • Pets: American Classic, American Classic Puppies, CFA, KONG, Paw Doodles, PLUBBER, Squeak Grrrs.
  • Outdoor & Seasonal: Funnoodle, Halloween Costumes, Outdoor Furniture

I already see a great trend going forward partnering the company’s Halloween costume line with Princess Merida from Brave. She is the first female protagonist in a Pixar film, you know. In fact, Jakks Halloween costume company Disguise.com is sure to have some of the most sought after Halloween costumes in: Barack Obama, Mitt Romney, Princess Merida, Spider Man, Men in Black, and the entire Avengers lineup. The most popular movie of the year was The Avengers and I’m willing to bet that they will be popular Halloween choices.

Jakks recently gained the North American toy rights for Daniel Tiger’s Neighborhood, an upcoming television series aimed at children ages 2-4. The show will be the first put out by The Fred Rogers Company in a long time. The last show by the company was the famous Mister Rogers’ Neighborhood, which aired on PBS for years. Daniel Tiger’s Neighborhood stars four year old Daniel Tiger, who will let viewers into his world through his eyes. If the show gets the viewers, this deal should be easy for Jakks Pacific to capitalize on.

Shares of Jakks dropped this week on news of a tender offer. Jakks offered to buy
back shares from existing shareholders for $20. The $20 mark is the same that was
offered by Oaktree Capital previously. Over 22 million shares were offered back to
the company, of which 4 million will be bought back by Jakks. Jakks is essentially
buying back 15% of outstanding shares. The amount of shares offered back show a lack
of confidence that Jakks will ever get a buyout over $20. Jakks shares have dropped
down to $16 after the tender offer, down from a high of $20.37 in the last year.

Reminder: Jakks Pacific reports earnings on July 20th.

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