September 15, 2010
Top Trumps

HABA

ESA Files Brief Against 2005 California Law

The Entertainment Software Association (ESA) has filed a brief asking the United States Supreme Court to find a 2005 California law restricting the sale and rental of computer and video games to minors unconstitutional. ESA has said that the statute would deny First Amendment protections to video and computer games that the state believes are “offensively violent.”
ESA is arguing that there are less restrictive ways of ensuring that computer and video games are parent-approved, such as the Entertainment Software Rating Board (ESRB) rating system and parental controls. ESA has also said that lower courts have repeatedly rused that there is no credible evidence that computer and video games cause harm to minors, which is the reason behind the California law.
The Supreme Court case is Schwarzenegger v. Entertainment Merchants Association and Entertainment Software Association. Oral arguments will begin on November 2.

Toys “R” Us Premieres “Bootiques” and Expands Holiday Pop-Up Stores

Toys "R" UsFor this Halloween season, Toys “R” Us stores nationwide and Toysrus.com have introduced Halloween “bootiques” filled with costumes, accessories, candy, safety items, and more. The company has also expanded its Halloween safety product assortment, and has launched a new digital costume catalog online at Toysrus.com/Halloween. In addition to the new selection of safety products, parents and kids can prepare for Halloween night with Halloween safety tips at Toysrus.com/Safety.com.
Toys “R” Us has also announced plans to operate approximately 600 Toys “R” Us Express stores in malls and shopping centers nationwide, in addition to its 587 full-size Toys "R" Us stores in the United States. The new pop-up stores will add an additional 2.4 million square feet of toy-selling space for the holiday season. In addition, the company’s more than 260 Babies "R" Us stores will again offer a wider selection of toys for the holiday season.

MEGA Brands, Inc. Comments on European Court Decision on Trademarks

MEGA Brands, Inc. confirmed that in a September 14 judgment, the European Court of Justice rejected an appeal by Lego Juris A/S of a 2008 lower court decision invalidating Lego’s three-dimensional trademark registration for its building block. This decision by the European Court of Justice, which cannot be appealed, is applicable in all countries in the European Union.
Since the original decision by the Cancellation Division of the European Office for Harmonization in the Internal Market ("OHIM") invalidating Lego's trademark registration has been applicable since 2004, the judgment by the European Court of Justice has no impact on MEGA Brands’ influence in the European Union.

Little Airplane Productions’ Small Potatoes Inks Deal with Playhouse Disney

Small PotatoesLittle Airplane Productions’ new short-form animated series Small Potatoes is rolling into MIPCOM with news of a major pre-sale agreement with Disney Channel's Playhouse Disney in the U.S. The 26 x 3 series has already been sold to CBeebies in the UK, NRK in Norway, SVT in Sweden, ABC TV in Australia, and TVO and Knowledge in Canada. ABC Commercial has also completed a deal for the Australian music and home entertainment rights to the show.


Random House Partners with Smashing Ideas to Create Children’s Apps

Random House, Inc. will partner with digital media agency Smashing Ideas to develop book-based children’s apps for mobile devices. Random House Children’s Books will work in close collaboration with Smashing Ideas’ newly formed ePublishing group and with key Random House children’s books authors, illustrators, and brands to produce innovative digital products that combine story, design, and technology.

Report: August Retail Sales Increase Still Reflects Cautious Consumer 

The back-to-school shopping season finished on a positive note as retailers’ aggressive promotions and state sales tax holidays helped lure families into the stores last month. According to the National Retail Federation, August retail industry sales (which exclude automobiles, gas stations, and restaurants) rose 0.5 percent seasonally adjusted over July and increased 3 percent unadjusted over last year.
“Most Americans are in a much better financial position than a year ago, but they are still spending cautiously, looking for bargains and comparing prices before buying,” said NRF President and CEO Matthew Shay. “After leveraging aggressive promotions to bring in back-to-school shoppers, retailers are putting the finishing touches on promotions and pricing for the upcoming holiday season.”
August retail sales released September 14 by the U.S. Commerce Department show total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) increased 0.4 percent seasonally adjusted over July and increased 3.5 percent unadjusted year-over-year.
Led by traditional back-to-school categories, retail sales across the board showed strength. Clothing and clothing accessory stores sales increased 1.6 percent seasonally adjusted and 3 percent unadjusted over last year. Sales at health and personal care stores sales increased 0.6 percent seasonally adjusted over July and 2.2 percent unadjusted over last August. Sporting goods, hobby, book, and music stores sales increased 0.9 percent seasonally adjusted over July and 4.2 percent unadjusted year-over-year. Building material and garden equipment stores sales were flat from last month and increased a strong 6.6 percent unadjusted from last August.

Disney to Hold Discussion on Web-Connected Toys Standards

At the Engage Conference and Expo, taking place September 22-23 in Santa Clara, Calif., Disney Consumer Products (DCP) will lead a discussion detailing a proposal to establish a set of industry development and technology standards for web-connected toys. The talk, “Web-Connected Toys: A Discussion on Standards with Disney Consumer Products,” will be led by Armen Mkrtchyan, technology manager of toys and consumer electronics at DCP on September 22, starting at 11:30 a.m. Topics will include the impact to kids and the industry’s response, current toy business models compared to the game industry, if standardization would reduce costs and increase playability, and how Disney is exploring standardization.
For more information on Engage Conference and Expo and how to register, visit www.engageexpo.com.

RC2’s The First Years Brand Inks Deal with Natus Medical for GumDrop Line

The First YearsRC2 Corporation announced that its The First Years brand, which specializes in mother, infant, and toddler products, has signed a multi-year product licensing agreement with Natus Medical Incorporated to manufacture and distribute a line of GumDrop pacifiers, accessories, and other related items. The First Years’ GumDrop product line is slated to debut at retail in early 2011.
GumDrop Pacifiers are available in two sizes, newborn (0 to 3 months) and infant. In addition to pacifiers, The First Years’ GumDrop line will include pacifier clips and cases.

European Toy and Nursery Sales Increased in 2009

According to The NPD Group, 2009 traditional toy sales for children ages 0-23 months in the big five European countries (France, Germany, Italy, Spain, and the UK) reached €1.3bn overall at retail. Toy sales for kids under the age of 2 increased by 1 percent, with the UK leading the way in market size, nearly three times larger than Italy or Spain.
Both France and Britain reported a growth in 2009 in nursery equipment (2 percent and 5 percent, respectively). Wheeled goods dominated in terms of sales, representing nearly a third of €605m overall sales in the UK last year. Europe has also seen an increase in innovation, with dual-facing (or two-directional) pushchair composing more than 40 percent of the pushchairs in France, an increase of 80 percent.

Madame Alexander

American Greetings Properties Names Gia DeLaney VP of Program Sales

American Greetings Properties, the intellectual property and outbound licensing division of American Greetings Corporation, has named Gia DeLaney vice president of program sales. Most recently, DeLaney served as vice president of international program sales for 4Kids Entertainment, Inc. In her new role at AGP, DeLaney will be responsible for selling both classic and new AGP entertainment globally, including Strawberry Shortcake, Care Bears, Maryoku Yummy, and Twisted Whiskers, among others.

John Wayne Enterprises Appoints SVP of Global Partnership and Licensing

John Wayne Enterprises, LLC, owner and licensor of the John Wayne brand, has appointed Lisa Streff to the newly created position of senior vice president of global partnerships & licensing. Streff has spent more than 15 years in the consumer products industry serving in executive and management level positions at major studios, as well as a leading independent children’s company. Prior to joining John Wayne Enterprises, she most recently served as senior vice president of U.S. Consumer Products at Cookie Jar Entertainment (previously DIC Entertainment). In her new position, Streff will oversee the development and implementation of worldwide licensing and merchandising and corporate and promotional partnership programs with a mission to increase the global awareness of the John Wayne brand.  

Trudy Sells Assets to MMAC

Trudy Corporation has closed its previously announced transaction and sold substantially all of its assets to MMAC, LLC. The sold assets include Trudy’s on-going business as publisher of children’s educational story and novelty books, audio books, and plush toys, under the trade names Soundprints, Studio Mouse, and Music for Little People.
Assets assumed by MMAC, including secured and unsecured liabilities of Trudy, include loans from an affiliate of MMAC to Trudy in the principal amount of $545,000 and with the exception of $2.7 million of personal debt owed to a principal shareholder and Trudy Chairman William W. Burnham.
Trudy will receive upon completion of the final calculation of the net asset value of the company (estimated to be completed approximately 90-120 days from the closing), an equity interest in MMAC, estimated to be in the range of 4.75 percent.
Ashley Andersen Zantop, former CEO and president of Trudy; Fell Herdeg, former CFO; and Burnham, former director of corporate development of Trudy, will serve in the same positions at MMAC. In addition, Burnham and Andersen Zantop will join the board of directors of MMAC.
Trudy's senior management will review and, when appropriate, may recommend to its board of directors that Trudy dissolve or sell its corporate shell. There is no assurance that a sale of the shell can be arranged.

Toys “R” Us Reports Second Quarter Financial Results

Toys “R” Us, Inc. reported financial results for the second quarter of fiscal 2010, which ended July 31. Comparable store net sales grew 0.6 percent domestically and declined 3.2 percent internationally. The company stated that increases in most product categories were offset by a decline in video games. Total net sales were $2.6 billion, the same amount in 2009. Net loss for the quarter was $14 million, compared to net earnings of $27 million for the second quarter of fiscal 2009.  The company completed three refinancings after the end of the quarter.

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