August 24, 1999 17:18
Sacre Bleu! It's Pokémon!
August 24,
1999/FOOLWIRE/ -- When you're talking fad power around the watercooler these
days, you needn't look much further than Pokémon, the Nintendo-powered toy,
collectible, and video gaming craze that came stateside after conquering
Japan (and giving a few hundred kids seizures courtesy of the flashing
lights of its television show).
It's everywhere you look these days: I've seen Pikachu, the adorable and
rodent-like center of the Pokémon universe, on T-shirts, trading cards,
collectible coins, dolls, and -- before the little fella ran off on me -- my
keychain (which once nearly got me attacked by an enthusiastic
eight-year-old boy who lives in my building).
By now, the story of the company that brought Pokémon to America is pretty
well known. 4Kids Entertainment (Nasdaq: KIDE) has not only benefited from
the popularity of the battling creatures but from several of its other
licensed properties, which include World Championship Wrestling (WCW of
"Monday Nitro" fame), Comedy Central, Nintendo of America, and James Bond.
The stock's chart over the last year tells the tale of a jump worthy of
Jimmy Snuka.
Now, investors appear to be looking for some northern exposure to future
Pokémon sales as they try to "catch 'em all." In the just under three weeks
since Montreal-based toy distributor Grand Toys International Inc. (Nasdaq:
GRIN) announced the license to make and distribute Pokémon products in
Canada, the shares -- after today's more than 50% jump -- have more than
doubled.
Pokémon adds a hip and exciting license to Grand's product mix, which
already includes beach toys, puzzles, Spice Girls-themed accessories, and
Tiger electronic games. Tiger -- bought in February of 1998 by Hasbro (AMEX:
HAS) -- and action figure maker Toy Biz accounted for about 64% of the
company's sales last year.
But it also marks a new direction for the company, which last year didn't
make any of the toys it distributed. (That changed in January when the
company bought Connecticut puzzlemaker Ark Inc.) Grand Toys plans to make
the Pokémon stuff, with an array of balls, kites, and back-to-school items
like pens, pencils, portfolios, and binders.
This seems like a good line. Since the toy biz is seasonal, why not exploit
it? Besides, testing out a Pokémon line in the fall might also prove useful
in determining how much business to expect from the brand come the holiday
season.
And doing some of its own manufacturing could go a long way toward reducing
the company's reliance on a few key suppliers. Of course, it also presents
new challenges for a company that traditionally hasn't had to worry about
hiring assembly line workers or getting raw materials on time; investors
looking to hold this one through the initial run-up should watch the
company's progress in this department carefully.
Is it wrong not to discuss Grand's Canadian Furby license, including a Furby
that squawks en Français? Hope not, since those things are darn ugly.
Besides, I haven't heard nearly as much clamoring for them as I have for the
savage Pocket Monster.
Related Links:
Grand Toys Site: www.grand.com
Pokémon World: www.pokemon.com
Daily Double, 4/22/99, 4Kids Entertainment:
www.fool.com/DDouble/1999/DDouble990422.htm
Salon.com, "The Secret World of Pokemon":
salon.com
-- By Dave Marino-Nachison
newsalert.com
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