Mega Brands tells shareholders meeting that growth momentum is building - InfoNews

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Mega Brands tells shareholders meeting that growth momentum is building

June 15, 2012 - 2:19 PM

MONTREAL - Canadian toy maker Mega Brands told shareholders Friday that momentum is building in its efforts to regain its lost lustre, banking on well known characters to give its products a boost.

The Montreal-based company is counting on a series of new construction toys along with a resurgence of its stationery and activities business to continue its turnaround from near bankruptcy.

Much of the hope is centred on courting girls with the introduction of building sets based on the iconic Barbie brand early next year.

But Mega Brands (TSX:MB) is also adding construction toys based on licences of leading video game Skylanders, online game World of Warcraft, Hot Wheels and an upcoming Spiderman movie.

"Mega Brands has regained momentum," chief innovation officer Vic Bertrand told shareholders at the annual meeting near its large production facility in Montreal.

Bertrand gave shareholders a preview of some of the toys that will soon hit store shelves.

Hope for success of the Barbie building set rests in the idea that while boys are known to build and crash their creations, girls prefer to build and accessorize. The new Barbie offering includes miniature dolls, a whole suburb with a large pink dream house and beach house that can be assembled, along with a pink car.

Toy analyst Gerrick Johnson of BMO Capital Markets says licences are key in the toy business and Barbie is an iconic brand that nobody else has.

He says Mega Brands has an opportunity to gain market share from industry leader Lego, which sells pricey box sets craved particularly by young boys. It also recently entered the girls construction segment.

The building segment is the fastest growing toy market, expanding 23 per cent last year.

Mega Brands CEO Marc Bertrand said he believes the company's new products can help it participate strongly in this expanding segment and even steal some shelf space from Lego.

Content and innovation are key.

"If we have the right content, whether they're interested in Lego or an action figure or a vehicle, we think they're going to choose Mega Bloks," he said in an interview.

A move into the educational craft business through a partnership with LeapFrog, along with a resurgence in the Rose Art brand will also help Mega Brands reach its target of returning to $500 million in annual sales in three years, Bertrand added.

On the Toronto Stock Exchange, Mega Brands shares lost 21 cents, or 3.28 per cent at C$6.19 in afternoon trading.

News from © The Canadian Press, 2012
The Canadian Press

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