Top company by employee – 92 – Hasbro – Rhode Island US
Industry: Manufacturing & Production
Ownership: Publicly quoted/held
State: Rhode Island
Previous rank: 82
2011 revenue ($ millions): $4,285
What makes it so great?
The world’s second-largest toy company enhanced its vacation policy by giving new employees three weeks off in their first year instead of having to wait five years.
|Traded as||NASDAQ: HAS
S&P 500 Component
|Industry||Toys, games, media andentertainment|
|Founded||1923 (as Hassenfeld Brothers)
1968 (as Hasbro)
|Founder(s)||Henry, Hilal, and Herman Hassenfeld|
|Headquarters||Pawtucket, Rhode Island, US|
|Key people||Alfred J. Verrecchia
(President and CEO)
|Revenue||US$4.07 billion (FY 2009)|
|Operating income||US$922 million (FY 2009)|
|Net income||US$375 million (FY 2009)|
|Total assets||US$3.90 billion (FY 2009)|
|Total equity||US$1.39 billion (FY 2008)|
|Website||Hasbro.com Hub network|
Hasbro Inc. (formerly Hassenfeld Brothers) is an American multinational toy and board game company. It is one of the largest toy makers in the world. The corporate headquarters is located in Pawtucket, Rhode Island. The majority of its products are manufactured in East Asia.
In 1923, three brothers, Henry, Hilal, and Herman Hassenfeld, founded Hassenfeld Brothers, a company selling textile remnants, inProvidence, Rhode Island. Over the next two decades, the company expanded to produce pencil cases and school supplies. In 1926, Hassenfeld Brothers was incorporated with Hilal leaving for another textile business while Henry took charge of the corporation. With cost of pencils rising and their pencil supplier making pencil cases, Hassenfelds began making their own pencils becoming a source of funding for future lines.
In the 1940s, Hassenfeld Brothers produced doctor and nurse kits, its first toys and modeling clay becoming a primarily toy company by 1942. With Hilal’s death in 1943, Henry Hassenfeld became CEO while his son, Merrill, became president. The company entered the plastic fields during World War II to support its toy line. Hassenfeld Brothers’ first toy hit was Mr. Potato Head, which the company purchased from inventor George Lerner in 1952. The toy was a smash success. The company became a Disney major licensee in 1954.
In 1960, Henry died and Merrill took over the parent company and his older brother, Harold, ran the pencil-making business, Empire Pencil. Hassenfeld Brothers expanded to Canada with Hassenfeld Brothers (Canada) Ltd. in 1961. Approached in 1963 to a licensed toy based on a Marine Corp based TV Series, “The Lieutenant" which they turned down as they did not want to be tied to a possible short lived TV show. Instead in 1964, Hassenfeld Brothers produced the G.I. Joe toy, which they termed an “action figure" in order to market the toy to boys who wouldn’t want to play with “dolls." In 1964 and 1965, GI Joe accounted for 2/3 of Hassenfeld’s sales.
Having previously sold toys under the Hasbro trade name, the company shortened its name to Hasbro Industries in 1968 and sold a minor stake in the corporation to the public.
With the unpopular Vietnam War at its height in 1969, Hasbro redesigned GI Joe to be less militaristic and more adventure orientated. Its promotional efforts included the catchphrase “Boy Oh Boy! It’s A Hasbro Toy!" in television commercials and print ads. Also 1969 Hasbro bought Burt Claster Enterprises, which produced “Romper Room" and had just began a Romper Room toy line. A month-long Teamsters strike and Far Eastern supplier troubles caused the company to have a $1 million loss for the year.
In 1970, Hasbro began a plan of diversification and opened the Romper Room Nursery School franchise chain to cash in on President Richard M. Nixon’s Family Assistance Plan which subsidized day care for working mothers. By 1975 the company had ended the nursery chain. Hasbro also entered the cookware field with the Galloping Gourmet line based on a contemporary television cooking show. With an attack of termites on the line’s salad bowls, the line collapsed.
Two new 1970s toys were public relations disasters. The Javelin Darts which were similar to the ancient Roman plumbata. On December 19, 1988, the Consumer Product Safety Commission banned lawn darts from sale in the United States due to their hazards as a flying projectile with a sharp metal point causing multiple deaths. The Hypo-Squirt, hypodermic needle shaped water gun, tagged by the press as a “junior junkie" kit. Both were recalled. While Romper Room and its toy line had continued success, Action for Children’s Television citizens group considered the program as an advertising channel for toys.
Merrill Hassenfeld took over as CEO in 1974 with his son, Stephen D. Hassenfeld, becoming president. The company became profitable once again had mixed results due to cash flow problems from increasing the number of toys in the line, to offset G.I. Joe’s declining sales. In 1975, the G.I. Joe line was ended by Hasbro caused by the rising price of plastic via its raw material, crude oil’s increasing prices. In 1977, Hasbro’s losses were $2.5 million and the company held a large debt load. That same year, the Hasbro acquired Peanuts cartoon characters licensing rights. With the financial situation poor, Hasbro’s bankers made the company temporarily stop dividend payments in early 1979. The toy division’s losses increased Harold Hassenfeld’s resentment regarding the company’s treatment of the Empire Pencil subsidiary as Empire received lower levels of capital spending to profits than did the toy division. With Merrill’s death in 1979, Harold did not recognize Stephen’s authority as the successor to the chairman & CEO position. As a solution, Hasbro spun off Empire Pencil in 1980, then the nation’s largest pencil maker with Harold trading his Hasbro shares for those of Empire. Stephen then became both the CEO and chairman of the board. Between 1978 and 1981, Stephen reduced the Hasbro product line by one-third and its new products by one-half. Hasbro focused on simple, low cost, longer life cycles toys like Mr. Potato Head. Hasbro thus stayed out of the electronic games field which went bust in the early 1980s.
In 1982, Hasbro revived its G.I. Joe line — with the help of Marvel Comics — as an anti-terrorist commando based on current events. The company launched the successfulTransformers toy line along with a children’s animated TV series two years later. With the toys and TV Series being popular, Stephen Hassenfeld posed with the toys for a People magazine cover photo.
In 1982, Hasbro produced another successful toy franchise, My Little Pony. In 1983, Hasbro purchased GLENCO Infant Items, a manufacturer of infant products and the world’s largest bib producer and Knickerbocker Toy Company, a Warner Communications struggling subsidiary. Hasbro paid Warner with 37 percent of its own stock — paid into a Hasbro executive control voting trust — and also received a cash infusion. In 1984, Alan Hassenfeld took over as president from his brother Stephen, who continued as CEO and chairman. That same year, the company (then the nation’s sixth-best-selling toymaker) acquired the Milton Bradley Company (then the nation’s fifth bestselling toymaker) bringing The Game of Life, Twister, Easy Money and Playskool into the Hasbro fold becoming Hasbro Bradley. Stephen Hassenfeld became the merged company’s president and CEO with Milton Bradley chief James Shea Jr. taking the chairman position. However, the executives clashed and Shea left after a few months, and Stephen and Alan returned to their previous positions.
A year later, the company changed its name again to just Hasbro, Inc. The Transformers Jumpstarters toys were the subject of a lawsuit in 1985 when Hasbro sued a toy manufacturer for selling toys based on their design. Hasbro won the suit.
In the mid-1980s, Hasbro moved past Mattel to become the world’s largest toy company. Hasbro then moved to outsell the Mattel’s Barbie in the fashion doll market with 1986 introduced Jem, a record producer/rock musician dual identity fashion doll. Initially posting strong sales, Jem plummeted and was withdrawn from the market in 1987. Hasbro followed up in 1988 with Maxie, a Barbie-sized blonde doll so Barbie clothing and accessories would fit. Maxie lasted until 1990.
Under Alan’s initiative in the late 1980s, Hasbro moved to increase international sales by taking US market failed toys overseas and selling them for as much as four time the original prices. This increased international sales $268 million in 1985 to $433 million in 1988.
In 1988, Hasbro purchased part of Coleco Industries’s indoor and outdoor children’s furniture and ride-on toy product lines for $21 million including two just closed manufacturing plants in Amsterdam, N.Y. In July 1989, Hasbro acquired bankrupt Coleco for $85 million. Stephen Hassenfeld died later that year with the company having gone from sales of $104 million in the year he took control to 1989 sales of $1,410 million.
Alan succeeded Stephen as chairman and CEO. In 1991, Hasbro purchased Tonka Corp. for $486 million along its Parker Brothers unit, the maker of Monopoly, and Kenner Products. Milton Bradley and Parker Brothers were merged into one division Alan moved to expand Hasbro overseas with new units in Greece, Hungary, and Mexico.
Alan saw the Far East as an important market to expand into so in 1992, Hasbro purchased Nomura Toys Ltd. in Japan, and majority ownership of Palmyra, a Southeast Asian toy distributor. These increased the proportion of international sales from 22% in 1985 to 45% ($1.28 billion) in 1995. In 1993, Hasbro lost its bid for J.W. Spear, a U.K.-based game maker, to Mattel.
In the US, Hasbro’s growth since 1980 were from acquisitions and the leveraging of the new assets. New product development was not as successful except for movie and TV tie-in product lines with Jurassic Park and Barney. Thus, US sales were stagnate in the early 1990s then fell from 1993 to 1995. To turn around domestic performance in 1994, Hasbro merged Hasbro Toy, Playskool, Playskool Baby, Kenner, and Kid Dimension units into the Hasbro Toy Group. Meanwhile, Mattel purchased Fisher-Price and retook the top spot in the toy industry.
Hasbro Interactive was started in 1995 and released the Monopoly game on CD-ROM. Mattel also proposed a merger that year, but was turned down by the Hasbro board in 1996 due to antitrust issues and Justice Department investigation into exclusionary policies between toy manufacturers and toy retailers, particularly Toys “R" Us.
In 1998 Hasbro bought Avalon Hill for $6 million and in 1999 Wizards of the Coast was bought in a deal worth $325 million. Wizards of the Coast is now a subsidiary of Hasbro and has Avalon Hill as its division. In 2001 money-losing Hasbro Interactive was sold to Infogrames, a French software concern, for $100 million.
In 2007, a workers’ rights group investigated several of Hasbro’s Chinese suppliers and found that, in one instance, a toy factory in China’s Guangxi Province had hired 1000 junior high school students. The same group discovered other widespread labor violations, including unsafe working conditions, mandatory overtime, verbal abuse and sexual harassmentof employees. Hasbro issued a statement, saying that it would “act swiftly and decisively in making any necessary changes" and had “increased the intensity of [its] ongoing safety review efforts." Critics pointed out that Hasbro had no official regulatory control of these factories. Hasbro responded by hiring independent auditors. These auditors make unannounced visits to the East Asian subcontractors. Factory managers have been coached in how to fool the auditors.
Hasbro is collaborating with Discovery Communications on Hub Network, a new cable network which began on October 10, 2010. Hasbro also produces Marvel Comics and Star Wars toys, having recently renewed this deal through at least 2020.
Over the years Hasbro has outsourced the manufacture of its products to third-party companies, mostly in China. At the Chinese factories, which Hasbro does not directly own or operate, migrant workers are compensated with meager salaries for their labor. At one such factory, in Dongguan, China, basic assembly line jobs pay a little over one hundred US dollars per month, China’s minimum wage.
Outside Asia, Hasbro owns and operates only two manufacturing facilities, one in Waterford, Ireland, the other in East Longmeadow, Massachusetts, USA. In recent years, the company has cut jobs at both plants in response to increasing competition from lower cost locations in China. At the end of 2006, for example, Hasbro’s Irish division laid off more than one third of its workforce.
Awards and Honors
The firm was named by Fortune magazine as one of the top 100 companies to work for in 2013, citing that the “company enhanced its vacation policy by giving new employees three weeks off in their first year instead of having to wait five years."
Hasbro primarily sells toys directed at either the girl or boy markets. As such, there have been criticisms that Hasbro’s toys reinforce gender stereotypes. For example, in December 2012, thirteen-year-old McKenna Pope started a campaign on Change.org calling on the company to create a “boy-friendly” version of the popular Easy-Bake Ovenand to feature boys on their packaging and materials. Her petition states that the lack of boys in Easy Bake marketing sends the message that “women cook, men work."Within a week over 30,000 people signed her petition and the campaign was featured on Good Morning America, the Los Angeles Times, and CNN among others.
There have also been criticisms of Hasbro for focusing some of its products on specific demographic groups. For example, in November 2012, a letter from a six-year-old Irish girl complaining about the lack of female characters in the guessing game Guess Who? spread widely on social media and garnered attention in the press after the girl’s mother posted the exchange on her blog. News reports criticized Hasbro’s response as missing the point of the letter and not “kid-friendly." Guess Who? has previously received complaints over gender and ethnic bias in its choice of 24 images.
In 2012 Hasbro received a 1.6 million dollar tax credit from the state of Rhode Island with a promise to create 245 new jobs in the state. Instead they laid off more than 125 workers. This was followed in 2013 with further layoffs of North American workers, amounting to 10% of its salaried employees. Meanwhile CEO, Brian Goldner signed a new 5-year contract. As of fiscal year 2012, CEO, Brian Goldner had a total calculated compensation of US$9,684,285.
Some of the Hasbro-owned subsidiaries are:
- Child Guidance
- Milton Bradley
- Parker Brothers
- Selchow and Righter
- Tiger Electronics
- Wizards of the Coast
- Avalon Hill (brand)
- Hasbro Games Group
- Hasbro Toy Group
- Hasbro Studios
- Hasbro Films
- Cake Mix Studio
- Claster Television
- Empire Pencil
- Hasbro Interactive
- Larami (name is now retired and part of the Nerf brand)
Toys and games
Hasbro has several brands of toys and games aimed at different demographics. Some of its better-known toy lines (past and present) are:
- Action Man
- Battle Beasts
- Cabbage Patch Kids (1989–1994)
- Furby (2005–present)
- Easy-Bake Oven
- FurReal Friends (Furry Frenzies)
- G.I. Joe
- Sesame Street
- Jurassic Park
- Lincoln Logs
- Littlest Pet Shop
- Mr. Potato Head
- My Little Pony
- Pokémon (1998–2005)
- Pound Puppies (2010 TV series)
- Pound Puppies
- Star Wars
- Talk ‘n Play
Hasbro is the largest producer of board games in the world as a result of its component brands, such as Parker Brothers, Waddingtons, Milton Bradley, Wizards of the Coast, andAvalon Hill (all acquisitions since the 1980s). As a result it has well known and top selling games such as:
- Axis and Allies
- Candy Land
- Clue (Cluedo)
- Dungeons & Dragons (role-playing game)
- The Game of Life
- The Grape Escape
- Magic: The Gathering (Hasbro’s top-selling brand)
- Duel Masters Trading Card Game
- Monopoly (best selling board game ever according to the Guinness Book of World Records)
- Trivial Pursuit
- Mirror-Mirror (Winner of ITV1‘s ‘Design a Board Game Competition’)
Hasbro also produces many variations of most of their games. For example, in addition to original Scrabble, the game is also available as “Scrabble Deluxe Edition", “Scrabble Deluxe Travel Edition","Scrabble Junior", and “Scrabble Onyx Edition".
Hasbro also offers games of physical skill such as:
Hasbro began a short-lived video game development and publishing venture called Hasbro Interactive in the 1990s, but disbanded it in late 1999. Now Hasbro develops video games based on its brands through third-party developers and licensing strategies, notably with major American companies such as Activision, Electronic Arts and THQ.
On February 25, 2005, Hasbro announced that it would be introducing a musical toothbrush to the market. The Tooth Tunes, released in early 2007, transmits music from thejawbone to the ear when the bristles touch the teeth.