Hasbro Facing 'Difficult Changes' and Investor Lawsuit

Transformers News: Hasbro Facing 'Difficult Changes' and Investor Lawsuit

Friday, October 19th, 2018 3:23AM CDT

Categories: Press Releases, Company News
Posted by: Va'al   Views: 13,295

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We're getting news, alongside the quarterly investor calls and reports, that Hasbro seems to be having some issue at the moment, on a number of fronts.

According to a number of source, including the WPRI and the Providence Journal, there are indeed some 'difficult changes' happening over at the toy maker's, meaning that - despite no official confirmation - there may be some layoffs happening in the coming period (not ideal, given the holiday season approaching, and way too similar to the Toys R Us situation last year).

While the company won't confirm layoffs, Hasbro said Wednesday it is making "meaningful organizational changes" that will affect "a single-digit percentage" of its global workforce.

The Providence-based toymaker sent a statement to Eyewitness News after inquiries about possible layoffs at the company.

"While some of these changes are difficult, we must ensure we have the right teams in place with the right capabilities to lead the company into the future," spokeswoman Julie Duffy said in a statement. "We continue to add new capabilities based on our understanding of the consumer and how our retailers are going to market, while evolving the way we organize our business across our Brand Blueprint."


This, however, also follows what seems to be an investor lawsuit, conducted by Pomerantz Law Firm, concerning 'whether Hasbro and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices'. This apparently relates back to the financial report from last October, too.

The announcement of Hasbro making changes comes a day after Pomerantz Law Firm said that it is investigating claims on behalf of investors of Hasbro, Inc. as to whether Hasbro and certain of its officers and/or directors "have engaged in securities fraud or other unlawful business practices."

"The claims have no merit and we intend to vigorously defend against them," said Duffy and that the staff cuts are unrelated.

According to reports, in October of 2017 Hasbro said they saw a 5% decline in the Company’s U.S. and Canada segment’s operating profit to $217.3 million, compared to $228 million in 2016.

After the disclosures, Hasbro’s stock dropped $8.44 per share and closed at $89.75 per share on October 23, 2017.


We'll keep an eye on updates on this story, and bring them to you as soon as any developments arise, but do let us know your thoughts in the comments.

EDIT:

AcademyofDrX wrote:The excerpt below is directly from PR wire copy:

"According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (1) Hasbro's relationship with Toys ''R'' Us was becoming increasingly important to Hasbro's business, but Toys ''R'' Us was in far worse financial condition than was being publicly reported; (2) Hasbro was experiencing significant undisclosed adverse sales issues in two key markets - the United Kingdom and Brazil - which were negatively impacting Hasbro's efforts to grow sales in those markets; and (3) as a result of foregoing, defendants' statements about Hasbro's business and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages."

Companies are required by law to tell their shareholders how their business is doing. These statements have to be truthful. The alleged fraud is basically that before the TRU bankruptcy, Hasbro said that things were okay, and after they weren't very okay. That's the gist of it. Ther no expectation that there are fudged numbers in a ledger, but if Hasbro knew the risks of the bankruptcy and didn't tell investors, that would make those statements false. I wouldn't recommend reading too much into this stuff.
Credit(s): WPRI, Providence Journal, Marketwatch, Yahoo Finance
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Re: Hasbro Facing 'Difficult Changes' and Investor Lawsuit (1989818)
Posted by fenrir72 on October 19th, 2018 @ 5:14am CDT
This is SERIOUS folks!

Hb has its mitts on TF, SW,Marvel and Disney! The last 3 are Disney territory. Whether we like to admit it or not, SW and Marvel have been getting a bit too left political, heck, even ESPN (another Disney property) aka the boring sports channel because it no longer talks about sports has suffered greatly with low ratings and subscribers leaving.

https://awfulannouncing.com/espn/bob-ig ... field.html

Nothing wrong being SJW and all but there is a time and place for it (not with our suspension of disbelief hobbies playtime). Not to mention a recent study (see link)

https://www.moreincommon.com/hidden-tribes/

shows only about 8% to 10% of the American populace are the noisy nutjobs! The rest are just the busy normal average Joe and Jane who care for nothing of the white noise (i.e. APOLITICAL).

Yet when big companies like Disney placate to these groups who don't even invest (i.e. SPEND) in such products, alienating the silent majority, ..........there bye damaging the brand. :(

Trouble is, it was Hb who also got hit with huge INVENTORIES of unsold SW products (Marvel Comics isn't doing too good either). I am willing to bet this took a huge chunk of the "black" Hb profits leading it to bleed red (don't get me started with the clusterfrck of the last two TF movies and the overkill with Bumblebee).

Let's pray that Hb and its stockholders recover from this or ELSE......might take TF down with them in the drain. :-(
Re: Hasbro Facing 'Difficult Changes' and Investor Lawsuit (1989819)
Posted by kurthy on October 19th, 2018 @ 5:38am CDT
fenrir72 wrote:This is SERIOUS folks!

Hb has its mitts on TF, SW,Marvel and Disney! The last 3 are Disney territory. Whether we like to admit it or not, SW and Marvel have been getting a bit too left political, heck, even ESPN (another Disney property) aka the boring sports channel because it no longer talks about sports has suffered greatly with low ratings and subscribers leaving.

https://awfulannouncing.com/espn/bob-ig ... field.html

Nothing wrong being SJW and all but there is a time and place for it (not with our suspension of disbelief hobbies playtime). Not to mention a recent study (see link)

https://www.moreincommon.com/hidden-tribes/ I

shows only about 8% to 10% of the American populace are the noisy nutjobs! The rest are just the busy normal average Joe and Jane who care for nothing of the white noise (i.e. APOLITICAL).

Yet when big companies like Disney placate to these groups who don't even invest (i.e. SPEND) in such products, alienating the silent majority, ..........there bye damaging the brand. :(

Trouble is, it was Hb who also got hit with huge INVENTORIES of unsold SW products (Marvel Comics isn't doing too good either). I am willing to bet this took a huge chunk of the "black" Hb profits leading it to bleed red (don't get me started with the clusterfrck of the last two TF movies and the overkill with Bumblebee).

Let's pray that Hb and its stockholders recover from this or ELSE......might take TF down with them in the drain. :-(


Take your politics elsewhere.
Re: Hasbro Facing 'Difficult Changes' and Investor Lawsuit (1989830)
Posted by frogbat on October 19th, 2018 @ 7:19am CDT
howwwwww... I give them so much money!!! aherm

hope it gets sorted for our hobby's sake and for their employees
Re: Hasbro Facing 'Difficult Changes' and Investor Lawsuit (1989834)
Posted by Skritz on October 19th, 2018 @ 7:41am CDT
Like it or not, the more the Disney stuff circles the drain the more this will affect Transformers. Take whatever stance you want on all this, from looking at it economically to talking about the culture but the cold hard reality is: Hasbro will lose money if nobody wants to buy the MCU and Star Wars stuff and, as it happen, Star Wars merchandise has been doing poorly for a variety of reasons which go far beyond debates about the movie qualities, including having too much products on the shelves which cost too much and children not buying them. >:oP
Re: Hasbro Facing 'Difficult Changes' and Investor Lawsuit (1989860)
Posted by ScottyP on October 19th, 2018 @ 9:20am CDT
fenrir72 wrote::-(
This was a poorly written, borderline irrelevant post that reflects poorly on the Seibertron.com community. I urge you to do better in the future and focus on the facts presented rather than associate them with carefully selected talking points that have nothing to do with the article posted.
Re: Hasbro Facing 'Difficult Changes' and Investor Lawsuit (1989878)
Posted by Coptur on October 19th, 2018 @ 10:09am CDT
Truth hurts?
Re: Hasbro Facing 'Difficult Changes' and Investor Lawsuit (1989880)
Posted by fenrir72 on October 19th, 2018 @ 10:14am CDT
Coptur wrote:Truth hurts?


It sure does. :-D
Re: Hasbro Facing 'Difficult Changes' and Investor Lawsuit (1989881)
Posted by fenrir72 on October 19th, 2018 @ 10:16am CDT
The "Man Children" aren't buying them anymore. That's what hurts.

Fact: Iger is Disney CEO. He knows more than we do.
Fact? Too much SW every year diluted the brand. Open to debate. As if He'll admit to the public the real reason.

My linking to his statement on the status of ESPN not related? Really? Not related?

Hb got the exclusive rights to distribute a lot of Disney products. Star Wars being one of them. It's underperforming to put it lightly (the toys). Why it ain't moving? Some say the kids don't buy them anymore. Trouble is, it's the demographic with a lot of disposable income that isn't buying (i.e. the Man Children aka as you and me).

Why aren't they buying? What has dampened their appetite to buy? Aren't media like movies, comics etc the means to brainwash "encourage" the fans to buy? I only posited a very probable reason why no one is buying.

With SW hurt, Hb got hurt too! Hb get hurt, TF is affected too! Now we get these investor revolts.

Again, let's hope sanity returns to both sides (Hb and Disney) and just produce great APOLITCAL products that promotes escapism/suspension of disbelief.
Re: Hasbro Facing 'Difficult Changes' and Investor Lawsuit (1989884)
Posted by Rodimus Knight on October 19th, 2018 @ 10:32am CDT
ScottyP wrote:
fenrir72 wrote::-(
This was a poorly written, borderline irrelevant post that reflects poorly on the Seibertron.com community. I urge you to do better in the future and focus on the facts presented rather than associate them with carefully selected talking points that have nothing to do with the article posted.


It was rambling, but the basic point is valid. The more the companies that Hasbro is producing licensed items for do things to disenfranchise the fans (ie Kathleen Kennedy & Rian Johnson) the more it's going to affect the sales of the products that Hasbro sells and hurt Hasbro's bottom line. My figure buying habit was seriously affected by the lunatic rants of the earlier mentioned individuals. You throw out hate at your fan base, it's going to affect your bottom line.

Solo, although not a great movie was a fun one, was negatively affected by the the drama surrounding TLJ, so again product didn't sell (I still want figures from that line but I figure they'll end up on clearance soon enough). Star wars had really been a power house for Hasbro, until the people running Star Wars derailed the gravy train.

The quality of the Disney princess dolls hasn't really improved since Hasbro took over. They have more of a variety of faces and heads, but the same crappy articulation the Mattel ones had. They put a lot into the Decedents original line, and that sold well, but the sequel dolls are shelf warmers until clearanced out.

Marvel Comics could possibly be a thing of the past in the near future. Disney is already starting to license out characters to other companies. That is a direct result of the current batch of writers being well, I'll say it SJWs. Probably my favorite Comic in recent years was the Kamala Kahn Ms Marvel, then they got super political with it, and I stopped reading, although I did just buy her Marvel Rising doll, along with Ghost Spider.

Marvel Studies is more or less keeping the political stuff to a minimum, as is the Animation side of Marvel, but if they go the way of Star Wars, you'll see the Marvel figure revenue drop significantly as well.

That will have a negative effect on the Hasbro Bottom line, and Transformers will be negatively affected. Look at the number of terrible stickers they used in the POTP line (i mean seriously they had stickers on Starscream that you couldn't press flat because of details on the parts the stickers covered), when the previous lines had few on anything smaller then Titan Class. We could see more cheaply made figures for more money.
Re: Hasbro Facing 'Difficult Changes' and Investor Lawsuit (1989887)
Posted by Short Circuit on October 19th, 2018 @ 10:45am CDT
I didn't realize children's toy companies including messages of inclusiveness, diversity, honor, and the like counts as "leaning towards the left." But then again, I'm not paranoid. :roll:

Toys are tanking because electronics sales are up. Toys to life is surging again, and console sales are up (electronics are much more expensive and versatile than plastic figures). Hasbro's other IP's are doing average or about to be rebooted. (Transformers has gone full G1 to recenter the brand.) Xmas is around the corner and people tend to wait last minute. Marvel just dropped a huge cliffhanger and people won't be hype till Infinity War 2 unless they pull of a sleeper hit. The economy in general took a hit the past few months.

There's no need to get worked up and digging for hidden meanings. Companies restructure all the time. Things start anew. Trends and fads ebb and flow and come and go. You gotta take the good with the bad because with every upturn comes down, and Hasbro is trying to prepare so they can continue on with what they're doing.

Besides, they're multi-billion dollar corporations. They're fine as long as the CEOs don't destroy the company for personal gain like TRU America. And I'm sure keeping the Transformers IP around with tangible merch is more profitable then dropping it all.
Re: Hasbro Facing 'Difficult Changes' and Investor Lawsuit (1989889)
Posted by ZeroWolf on October 19th, 2018 @ 10:49am CDT
We would see cheaply made figures anyway because that's how they maximise profit (by minimising costs). It has nothing to do with people who, at a fundemental level are trying to make things better and fairer. A minority don't go about it the best way but considering the hate that gets thrown at them, I'm not suprised there's an escalation in arguments between the opposing groups.

Now the article in question is light on details, like why they are being accused of security fraud.

Edit:

Also what Short Circuit put, all of it.
Re: Hasbro Facing 'Difficult Changes' and Investor Lawsuit (1989897)
Posted by SW's SilverHammer on October 19th, 2018 @ 11:38am CDT
Look I have to pitch in here, mostly because there's clearly some bullshit here. Alright so the foremost thing about the toy market is it is changing, and not because of politics. The foremost reason is Hasbro and Mattel aren't the only game in town anymore. Unlike 1977, 1997 and 2007, the best outlet for star wars and marvel isn't the hasbro market; there are multiple third party companies like Hot Toys, MAFeX, and the Bandai Tamashii Nations; these companies do give the best representations of relevant movie centirc characters, like Captain America, Iron Man, Rey, and Kylo ren.

Sure they be comparatively more expensive import figures, but when you consider someone my take a couple of weeks and multiple trips to a target or Walmart to find a midling to decent 20-25 dollar black series/marvel legends figure. The cost differential isn't to extreme compared to buying a 50 to 60 dollar highly articulated, highly accurate S.H Figuarts from BBTS or AmiAmi in the comfort of your own home. Figures which will be released in japan on a set scheduled with equal distribution and will (probably) be at your house in 5 business days at the most. I work at a vintage toy store in downtown PDX, and the other day this kid, 7-10 was buying some oldschool vinyl Kaiju, when his mom chimed in "Don't you have the S.H MonsterArts gigan?". I'm not saying this is all kids and all collectors, but what i'm saying is the market for bigger better more expressive toys is open, it's not just collectors, it's also kids too, and most of those toys happen to be imports. I'm not saying this is the only reason, just that it's a major factor.

Hasbro will always have the comic exclusive interpretations of marvel characters and obscure star wars characters. One of my favorite black series Force Awakens figures is the Guavian bounty hunter and there ain't no way in heeeeeeell MAFeX is going to make him. Also for those people saying "oh star wars is too political with SJWS and thats why the toys aren't selling" people must be forgetting the absolute glut of Phantom Menace, Attack of The Clones, and Revenge of the Sith toys, and those movies are a hell of a lot weaker than TFA, TLJ, Rogue One, and the Han Solo Goes Solo, Solo Movie.
Re: Hasbro Facing 'Difficult Changes' and Investor Lawsuit (1989899)
Posted by Diaboragon on October 19th, 2018 @ 11:47am CDT
Short Circuit wrote:I didn't realize children's toy companies including messages of inclusiveness, diversity, honor, and the like counts as "leaning towards the left." But then again, I'm not paranoid. :roll:


The toys may not be political, but the people who direct their source material certainly are. And that's not on its own a bad thing, but it seems like in today's age if you don't agree with their stances 100%, they don't want you as part of their audience. That friction does not help with sales.
Re: Hasbro Facing 'Difficult Changes' and Investor Lawsuit (1989905)
Posted by AcademyofDrX on October 19th, 2018 @ 12:53pm CDT
All of this is nonsense and it has nothing to do with the original post, it's all off-topic.

If you think the number of stickers on a Starscream figure has ANYTHING to do with big business entertainment and the culture wars, you lack the maturity to read investor reports and economic news, including posts like this one.

If you want to criticize contemporary corporate mores in favor of representation, there are plenty of alt-right websites for that. This is a toy forum, for Primus' sake.
Re: Hasbro Facing 'Difficult Changes' and Investor Lawsuit (1989906)
Posted by Caelus on October 19th, 2018 @ 12:57pm CDT
I could get all raging "SJW" about things, but I'll say this instead.

Adult collectors make up a portion of toy consumers.

Straight white male collectors (what I infer to be the "disenfranchised" group of fans people are mewling about) make up a portion of adult collectors.

Politically conservative (or anti-liberal) collectors make up a portion of that "disenfranchised" demographic.

Collectors that pay attention to off-screen political twitter drama make up a portion of those conservative collectors.

Collectors that care enough about that drama to amend their shopping habits make up a portion of the collectors who pay attention to the drama.

Let's be generous and say that 50% of toy buyers are adult collectors, 50% of those collectors are part of a "disenfranchised" demographic (I have to use quotes because I can't even type that with a straight face), 50% of that demographic is anti-liberal, 50% of those anti-liberal collectors pay attention to what directors & content producers say on platforms like Twitter (which is really unlikely since only 20% of Americans use Twitter), and that 50% of those people will forego buying a Solo action figure because of something the director of another movie said that offended them.

.50 ^ 5 = 0.03125

So in the extremely unlikely situation that all of those strata are split 50/50, that accounts for a 3% dip in toy sales, and only in the licensed, collector-marketed toy sales (e.g., Star Wars: Black Series), which themselves make up only a portion of Hasbro's products. And that also doesn't consider the corresponding increase in toy sales that would come from inclusive story-telling and content creators voicing progressive morals.

Meanwhile, child population growth is slowing due to people having fewer kids, and children are continuing to shift their interest to interactive media (e.g., tablet games, consoles) for their indoor entertainment. I suspect that has a LOT more to do with poor brand performance than some anti-SJWs feeling butt-hurt because companies are paying attention to other demographic groups.
Re: Hasbro Facing 'Difficult Changes' and Investor Lawsuit (1989909)
Posted by f-primus-unicron on October 19th, 2018 @ 1:34pm CDT
what about the less quality and still more expensive than last years products and of course products that are not good even if the materials and prices were better?

im not going to say anything else about lack of articulation or simplified toys, that honestly depends on each persons preferences but overall lower quality and higher prices, and lackluster products design isnt going to do any good to hasbro at this point
Re: Hasbro Facing 'Difficult Changes' and Investor Lawsuit (1989913)
Posted by Skritz on October 19th, 2018 @ 2:45pm CDT
Let's not forget mass retail action figures aren't really a thing kids want these days. Videogames have been the hot 'new' thing (not so new anymore, but still) and have long relegated action figures to a secondary, if not tertiary role next to just wasting time on your phone. We might forget this when we collect Transformers because we still buy toys in our '30 and '40.

Star Wars has had problems on multiple angles, namely:
-The toys are overpriced.
-There is too much merchandise, since there is more than just the playset, figures and lego but also a ton of stuff like huge out of scale Stormtroopers and lightsaber builders and other tacky crap nobody wants, neither kids nor adult collectors.
-Said stuff is constantly on shelves due to Star Wars now being a yearly thing.
-The new movies haven't really been good at selling the new characters to an audience, meaning what does sell even decades later are your Darth Vaders and Luke Skywalkers.
-A sizable chunk of people didn't like The Last Jedi and Solo for a variety of reasons and that hurt merchandise sale.

Of course this is going to hurt Hasbro's bottom line when entire sublines of useless Star Wars merch end up clogging shelves, taking immense space in a market where toys increasingly sell less. It's basic economics: they offered too much of stuff nobody wanted. Simply spacing these movies by 2-3 years in between would have alleviated some of the problems. >:oP
Re: Hasbro Facing 'Difficult Changes' and Investor Lawsuit (1989918)
Posted by frogbat on October 19th, 2018 @ 3:08pm CDT
Think the biggest issue was toys r us’ demise. But hey I’m just an adult tyo collector...
Re: Hasbro Facing 'Difficult Changes' and Investor Lawsuit (1989919)
Posted by Flashwave on October 19th, 2018 @ 3:09pm CDT
Admittedly, I dont speak Legalese, but I think we are all getting the wrong c9nclusion here.

What I am interpretting (and very likely could be wrong) is that a few highwr ups did something illegal, which could be embezzling or falsely reporting money or lying on Quarterly Profits. The Investors want the Truth so they launched an investigation, and as a way of keeping the organization as a while clean, what we are seeing as "Layoffs" is is a nonbiased way of saying "Hasbro is electing to let go of the people under indictment and or the people under indictment and those guilty of assisting (secretaries etc.) In the lie." Possibly, a few innocent parties may get cut as well to make up the dofference of what might be owed to investors.

And again, I cpuld ve totally wrong. And maybe the Accused did what they did to hide that everythung was not hunky dory in sales, but that just doesnt feel likevthe whole stpry here.
Re: Hasbro Facing 'Difficult Changes' and Investor Lawsuit (1989929)
Posted by Black Hat on October 19th, 2018 @ 4:02pm CDT
In my experience, Star Wars and TLK stuff shelfwarmed HARD. There's still legions of Sqweeks and Barricade Deluxes on shelves, and the amount of assorted 5POA SW figures rotting away isn't pretty either. In the case of SW especially, not helped IMO by how bad some of those figures look. Like, I know a pocket money toy is never going to stand up to a Figuarts, but when the majority of the figures on sale are these mushy little 5POA things that wouldn't look out of place in the late 70s (and don't even have the same charm as the older figures) and the few decently poseable figures are too expensive for the young 'uns (£20 is a lot for a 6" figure in the context of little Jimmy's pocket money) and too poorly made for us overgrown children (compared to the Figuarts or Mafex offerings, Hasbro's SW figures just aren't very good) you can see why they didn't exactly fly off shelves.

So between that and TRU's demise I'm not surprised to see Hasbro struggling. The supposed fraud/whatever charges though, that is concerning.

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